161: Franchising with Carmen Chávez de Hesse
Brought to you by
Time to Pet. Go to timetopet.com/confessional for 50% off your first 3 months.
Pet Sitters International. Go to petsit.com and use ‘PSC15’ for $15 off your first year membership.
Summary:
Have you thought about franchising your pet care business? Carmen Chávez de Hesse, owner of Slinky Cat at Home, shares her experience of franchising and what we need to consider, from legal and financial obligations, to the management of a franchise. We also discuss the growth in cat care across the pet sitting industry and how she plans to leave a legacy business for her daughter.
Topics on this episode:
Leaving a legacy
Being an awesome cat sitter
Why choose a franchise?
Legal and financial considerations
What makes a good franchise?
Main takeaway: We all want growth and security in our business, so determining if you should franchise depends on how you run your business.
About our guest:
From emerging brands to brands with over 250 units, Carmen Chavez de Hesse has seen and done it all. The one wish all business and franchise owners have in common is having FREEDOM. With over 20 years of experience in business development, franchising and licensing, operations and systems, sales and serving as a legal liaison, Carmen has a phenomenal record of success in scaling emerging brands from one to many in various industries including restaurant, pet, real estate, lifestyle and fitness. By providing the structure, systems, operations and industry knowledge, Carmen paves the way for business and franchise owners to get what they truly wish for…Freedom.
A nurturing solution seeker with a fresh approach to operations, and strongly connected and highly regarded in the Franchise industry, Carmen speaks franchising. Her extensive experience shortens her clients learning cycle and saves them precious time and money. She has no trouble speaking up if the model is not a good fit and she is a master of conflict resolution in the Franchise/Franchisor relationship.
When you provide positive reinforcement and a good system for redirection, the end result is always a win-win for building a great team, achieving better productivity and ultimately increasing business profitability.
Aptly recognizing the overwhelm of Franchisees (Zees)and the frustration of Franchisors (Zors), Carmen designed Franchisor University, an intensive in-person program that provides business development structure, operations and sales training and on boarding blueprints for both unit and area operators at all levels. Carmen also coaches numerous small business owners in transitioning from the “doer” to the “driver” so they can grow from single to multi-unit locations systematically and confidently.
Finding loving Cat Care should not be stressful for you or your kitty. We are on a mission to make it a pawsitve experience for everyone.
Carmen is a proud lover of felines and recently launched Slinky Cat at Home with her 12-year old daughter, Mina. What started out as a drawing made by her daughter has transformed into a much needed business service for local San Diego cat lovers.
Mina has been the greatest supporter of this start up and shares in the caring of felines. Their mission is to provide peace of mind kitty care while their owners are away. They enjoy a weekend trip to CatCon every year where they are feline fine in their element, learning, and engaging with other like-minded cat enthusiasts.
Links:
Talk franchising? Text 'franchise' to 619-865-9476
Talk cats? Text 'meow' to 619-865-9476
Give us a call! (636) 364-8260
Follow us on: Instagram, Facebook, Twitter
Subscribe on iTunes, Spotify, Google, Stitcher, & TuneIn
Email us at: feedback@petsitterconfessional.com
A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
franchise, cat, franchising, business, pet sitters, people, clients, pet, support, ideal clients, franchisee, location, marketing, slinky, run, industry, franchise disclosure document, franchisor, licensing, funded
SPEAKERS
Collin, Carmen Chávez de Hesse
00:17
Hi, I'm Meghan.
Collin 00:18
I'm Collin. And this is pet sitter confessional,
00:21
and open and honest discussion about life as a pet sitter
Collin 00:25
brought to you by time to pet and pet sitters International. franchising is always a very hot topic in the pet industry, and whether it's the right move for you whether to start one or to go into a franchising opportunity. So today, we're really excited to have Carmen Chávez de Hesse on to talk about what it's like to franchise a pet sitting business. As the owner of slinky cat at home, she cares for cats alongside with her daughter. And she also has a lot to share about what it's like leaving and leaving a legacy business. So let's get started.
Carmen Chávez de Hesse 00:58
Well, I'm so happy to be here calling. Thank you very much. And Hi, everyone. Thanks for tuning in today. I'm Carmen Chávez de Hesse, the owner of slinky cat at home, we're a cat centric, pet sitting service located in the north county coastal areas of San Diego. And for the past two years, we've been providing peace of mind to every Kitty in our care. And recognize that that's a really big responsibility and one that we want to make a positive experience for. Not just our cats, but the humans that love them as well.
Collin 01:30
How'd you get started two years ago,
Carmen Chávez de Hesse 01:32
so I've you know, I've worked a lot in the pet space, a lot through franchising, doggy daycare, grooming retail, but I've always had a preference for felines. And so knowing what I do about the pet industry, I was really gravitating towards a cat niche, cat centric business. Because I know the financial numbers in the pet industry. According to you know, the American pet Products Association, we're nearing $80 billion in this industry. And, you know, pet sitting and pet services is one of the fastest growing sectors for the last several years. So I knew that I could try to make something happen. That was really the first reason the second reason like many business owners, I had an enormous pain point of trying to find loving cat care to meet my needs as a cat owner when we traveled to Peru to see family for sometimes 30 days or longer. So I have two kitties, one that would eat plastic, and she could never stay home alone. She was a social leader. And then I have another kitty who lost five pounds in two weeks at a boarding facility that really didn't have a clue. So I see myself as both of my potential clients, slinky cat at home provides drop in kitty care service and other people's homes. But eventually we do want to grow into a cat hotel, and perhaps a potential franchise.
Collin 02:57
How did those experiences that you had with your two cats influence how you run and operate your business?
Carmen Chávez de Hesse 03:04
It was everything to me, because the first boarding experience I had for princess is a really cute little cat Hotel in someone's home here. And he's very eclectic. He has a really cool cat to cat cheese catchy cat tree that's roped in bird TV going on. And everything's red and black. And it's just a really great environment for the cat. And he would communicate to us and tell us funny story. Like he should write a book like princesses a fine Dame, but she's here with her boyfriend, Casanova today, and it just was a really feel good feeling. And she thrived in that environment. A couple years later, when we took her to a different boarding place. I was like, is she how she been and I didn't get any kind of communication like that. They told me she wasn't spilling her water. And then when I went back, they said oh, she's the messiest cat we've ever had. And I was like, I don't want to hear that, you know. And then with waffles when he lost weight, they actually gave me back the wrong food. And so I was just like, we can do this better. And coming from a background, you know, in animal behavior. And as a trainer, years ago, I just felt really in tuned to cats and I had a cat for 19 years. That was my everything that I took to Peru with me. And I remember coming home and just putting our heads together and go let's think about our day or let's talk about this. And so cats have a very different relationship with people. It's very different than dogs. It just, it just is in different ways. But I just felt that we could really bring some of what I needed to our clients experience because I don't believe cats hide are fearful. I believe they go to their safe spot and they just need we need to earn their trust. And that's what we focus on when I say peace of mind if the kiddies have peace of mind. Then I will have peace of mind as an owner, my clients will have peace of mind if they know that their cats are not stressed.
Collin 05:06
Yeah, being on both sides of that coin, right, you're able to experience and know, okay, I had this experience, how do I make sure either that that doesn't happen for my clients? Or how do I make it so that I can do that same thing? Like it really does give you a great perspective, whenever you've experienced both of those things.
Carmen Chávez de Hesse 05:24
It does, it does. And I and I think we're doing a good job of doing that I really do believe that we're doing a good job. And you know, I love our clients. And I love I had an exercise recently to picture my ideal clients. And it was every cat coming in, not the owners was laughing. But when you really went in deeper and looked at it, our ideal cats were our ideal clients. And they shared the same values and the same love of cats that that we do. And I it's not to say we don't ever have an occasional dog Slinky Dog a because we all know puppies can rule but you know, and we speak dog too. But you know, between myself and the team that I'm building, we really are cat fanatics. Yeah,
Collin 06:16
walk us through that process of defining your your ideal client, because I love that idea. And I don't think many business owners do that enough. So what what was the impetus for that? And what did that look like?
Carmen Chávez de Hesse 06:28
So our our ideal clients, so when I started this business, and again, I come from, you know, franchising background that we'll talk about, but when I started this business, the business models that I like, have tremendous value, but they're almost like industry changers and shifters. So it was important to me to not to have like a flat fee service is what I originally wanted. So for up to two kitties, it was just one fee, and my fee is higher than others in in my area. But why I bring that in is because for me, our ideal clients have money, they're invested in their animals. We don't discount our second, third or fourth or fifth visits, we are a flat fee for the amount of time that we're there. And and we're very specific on on the value that we're going to bring during that time. And I think our ideal clients appreciate that. And so obviously, their money is not an issue for them. And, you know, their, their cats are, are there everything in many cases and many cases that I have houses where you'd want to live as a cat for sure. I mean, every corner I have one, even my team member, I think she has 13 cat trees now. And we have cat rooms set up we have cat wheels we have it's a very different. It's a different client. And so these these kitties, they're thriving, they're absolutely thriving. And then our job is to come in and make sure they stay at peace and be in bridgeton get plenty of activity while we're there.
Collin 08:05
Yeah, yeah, I like that idea of going, Okay, like how can I communicate my services to my ideal client? Well, one of those as you did was through pricing. Like, that is a great way to communicate it to that and you already know, like, I want people who are absolutely, positively head over heels in love and passionate for their cats, because you know that they're going to be the best ones that you want to work for.
Carmen Chávez de Hesse 08:25
Yes, exactly. And they are and we all know that. I mean, I've only ever had anybody kind of challenged our pricing maybe twice and once recently, but she also interviewed five other pet sitters. So you know what, she was just not going to be an ideal fit. And it's okay to, to recognize that and acknowledge that. And I truly believe and I know most of the other pet sitters, I love to network with everybody in our community. And I don't look at it as any sort of a competition or anything. There are enough animals to go around. There are a lot. Yeah, and there's a pet sitter for everybody. And if I'm not the right one for them, you know, that's fine, too.
Collin 09:04
Yeah, that's good to keep in mind. Now I know. You also work with your daughter in your business. What's that? Like?
Carmen Chávez de Hesse 09:11
Oh my god, I'm so glad you asked this because I my daughter's name is Marina. She goes by Mimi. And you know, my vision when we launched slinky cat at home was to create a legacy business for her and whether or not she works in it years down the road. This is my chance to create a legacy business for her. I envision her and her friends, you know, supporting me as they're growing older and before they go to college. She's 14 now and I'm fortunate that she still wants to work with me. She's loved by all of our human clients and adored by the cats and she's often considered a cat whisperer. Over the past really three years when we first started moonlight cat sitting before I formed the business. she's learned so much about fostering cats. I volunteer at a local Nikki or kitten nurseries. So she knows all those stories, studying cat behavior, observing the cat personalities, all of it, she has been a part of as well as learning how to start and grow a business. And she's gotten a lot of that through my consulting too. But that's really, really fun to see. And we actually do an annual trip every year for the last four years to cat con, which is like, Comic Con for cat people.
Collin 10:34
That's awesome. That's really cool. I love hearing how you're getting her involved. And that idea of of a legacy business, something that's going to outlive yourself and to be able to work on that now with your daughter and to give to her moving forward. Like, that's, that's a wonderful idea.
Carmen Chávez de Hesse 10:50
And I think it's, and we'll talk about it in franchising, but you know, it's really, we all want to grow and get our businesses to the point where they can run without us sort of thing. And, you know, and that's what I mean, because, you know, her passion might be in fashion design, I already know, it's in a creative space. And it might not always be cats, but for the last, you know, while all of her life that we've had cats, but for the last, you know, four to five years, it's been all about the businesses that I've been working in the doggy daycare, the grooming the my our own business with kitties and fostering because fostering was just one step closer to reaching our goal, and really getting to learn about, you know, cats and, and nurturing the next generation of cats, we really want to be a part of that.
Collin 11:38
Yeah, it sounds like this idea of a legacy business is a lot more than just the physical business that you have. But the ideas, the concepts, the experiences that you take from being involved in it and passing it on to others.
Carmen Chávez de Hesse 11:50
Yeah, and you have to have a passion for it. We all know that they say, you know, it's not like, you know, you're working if you're really in love with what you're doing. But you have to be I'm an operations person at heart. So franchising is very much about systems and operations. And so I tried to buy my motto is discipline systems breed freedom. And so I really tried to structure things like that, so that at some point it it can run on its own. But I do have to say is a lot of pet sitters can relate to this, I am happiest when I'm sitting next to that cat. I love every single one of them. I love looking at what they're doing, trying to anticipate it. So I I need to capture my own self in that when I start to duplicate what I do in that space I how I'm going to stay connected to the cats that I love.
Collin 12:40
Yeah, because that's what most of us get in the business force, have those connections have those moments and it is it's really like, as stressful as many days can be when you're just being with the animals. It's really therapeutic. A lot of the time of just being able to sit with and enjoy their company and know that you are you are helping them.
Carmen Chávez de Hesse 12:59
Yeah, I actually blogged I did a mindfulness blog. But what we can learn about mindfulness from our cat, because there's just there's so much there when you really get too crazy. I'm not crazy.
Collin 13:14
Not a crazy cat lady, okay, nobody said it. Nobody.
Carmen Chávez de Hesse 13:17
Actually one of our Instagrams of cat lady, not crazy. But that could go a whole different way that could be a whole nother business.
Collin 13:29
Thinking about these characteristics, and what you look for in yourself and what you're training your daughter on, and the people on your team, what would you say makes an awesome cat sitter?
Carmen Chávez de Hesse 13:38
Yeah, so I'm sure set it I mean, must love cats, but they must love the humans that love cats. And I don't know how it is in the dog world of petsitting I'm sure there's some people that get quite a few instructions. I mean, we have clients that provide us with, you know, 15 pages of instructions, and, and maybe only two were related to the home but you know, cats are special diets, supplements, nutrients, a lot of the In Home kitty care, or older keys. And so, you know, we really have to have somebody that can pay attention to detail. And for me, you know, I have learned that the softer you can speak to kiddies, the better they respond, and they it's a peaceful nature and I'm a huge proponent of the fear free philosophy and mindset in pet sitting in general, but the pet sitters that I will cat sitters that I'll look to hire have to also share these values with me.
Collin 14:41
It's a different it's it is a different space. I know for some when when we are taking care of dogs, sometimes you get the owners who do they break out the pamphlet, right they break up the three ring binder, they go Here you go. I love those clients. We also get the clients who drop off their dogs and it's just a simple like, feed them about this much and they use their fingers, you know, to give you a measurement and they walk away like, Okay. Sure. Yeah, is a different space. And I've even noticed an increase nationally about people moving into cat sitting and cat care specifically. So why is there a need or talk about that change in the in the need for cat sitters?
Carmen Chávez de Hesse 15:21
Yeah, well, you know, obviously, because cats are going to dominate the world soon, but Right, right. And if that's not the reason, then maybe all of our dog lovers should cover their ears, but especially the pet sitters. But there truthfully, there are more cats than dogs in US households. And this is a stat from American pet Products Association. And I think it's a lot of reasons because, you know, most households that have cats might have more than one cat. I don't see I did get a call from one person that had eight cats, but that's extreme, I would think most of my clients have between two to three cats. And so I think there's a difference awareness coming up about cats in general. I was also looking at the number of cats entering San Diego market were warmer climate climate are to Diego Humane Society, kitten nursery takes care of about 3500 kittens under the age of four weeks old, every kitten season. And then that's not even counting the ones that are trapped and come into the fostering realm, or our cat cafes that are adopting out hundreds of cats, especially during COVID. So there's a lot of cats entering the San Diego market at this time. And if you look at some of your local shelters, you might be surprised to see that the adoption rates when they put out their stats are actually higher for cats than dogs. So it's the right time to get into the cat industry. And lots of people say there's riches and niches and I'm, you know, kind of banking on that. But I also like I said, this is a passion business for me. But then there's Miss conceptions. We talked about the stigma of the cat lady, crazy cat lady, and there's actually a national holiday to try to remove that stigma. And the cat ladies in the cat daddies who are super popular out there right now. Want to kind of change it people perceive cats as being aloof, independent, self sufficient, but in reality, they are creatures of habit and routine. And when you're not there, everything goes haywire. And we used to offer overnights, I don't want to do them anymore, because the cats were freaking out. They look at us and they go well, you're not our nighttime routine. What the heck are you doing here in my space, and we had one kitty that ran on the wheel the whole night. And I was like she was just trying to get she was stressed. So we'll go four or five times a day if our clients need us to. But I don't really think that we need to be there overnight. And like I said, People say you'll you'll never see our kitty she'll hide what we have to see your kitty. We need eyes on your kitty at every visit. And it's not she's not hiding. She's in a safe place. That's where she feels the most safe. So we tend to shelter in place. And we get great results by doing that. But again, we're trying to help support a changing perception about cats. My waffles rides in a shark stroller, a toddler stroller I take him as he goes to the beach for sunset he cruises Michaels and Petco all the time, we get kicked out of Vons. But he's just a really cool cat that is portable, and we've had cats on leashes at the park before it, I think that we're going to start seeing more of that as people start to recognize that they're not only they have a lot of cattitude Don't get me wrong, and they do like their sleep time and things like that. But they're highly trainable. And they need to be actively engaged mentally, which is the term of enrichment. And you'll see more puzzle feeders coming on the market and things things like that, too.
Collin 19:01
Well, yeah, it's I like that. But two things, as you said, there, it's just a there's just more of them. And B, it sounds like owners are becoming increasingly aware that there are that their cats have more needs that need to be met than are currently doing that. And they're turning and trying to take care of them more in in a in a better way.
Carmen Chávez de Hesse 19:19
Yes. And they live a long time. My family and was 19 Hmm. And you know, it's sad this year, I'll have to do it In Memoriam because of our cats that have transitioned. But that's a long time. And again, I'm not trying to compare the dog vs cat relationship because they're both beautiful. They represent unconditional love and fulfillment, and joy and peace. Everything's good in this world. Right? And but cats lived for 19 years. So when the cat passes, as does a dog, there's a huge break in routine for that person. And it's pretty tough.
Collin 20:01
Have you heard about time to pet krisann from raining cats and dogs has this to say
20:06
becoming a time to pet client has been a game changer for us. We can give our pet services clients real time, cloud based information they never imagined they'd be interested in. And most importantly, to me personally, I can better manage my company and look forward to more and not a small thing, times a pet is responsive to my requests for new features, and modifications to existing ones.
Collin 20:30
If you are looking for new petsitting software for your business, give time to pet a tribe, listeners of pet sitter confessional get 50% off their first three months when they sign up at time to pet.com slash confessional. You've mentioned COVID a couple times. So I did want to didn't touch on that. How has COVID been for you during
Carmen Chávez de Hesse 20:58
my goodness, the things we've learned what we're grateful for, you know, like, like every pet sitter, you know, I thought down the pipeline, early March, we had a national product Expo in Disneyland have 80,000 attendees from all over the world. And we had clients going to that Expo and it was canceled two days before the event. And so we started taking cancellations early and I knew we were in trouble. And then I was like so really pet sitters we had to be classified in the travel industry, not industry. And like everybody else, it was kind of this frenetic anxiety to pivot and we did walk, we do have some dog walking, but we did walk some dogs at first responders and tried to do concierge and support our local retirement communities and things like that. But it was minimal, it was minimal. And then my full time job became trying to become a quick learner on the PP e p, all the financial support for small businesses and solopreneurs and the ideal SBA loans. And I hired an HR consultant for my two employees, because thankfully, I became an employer of November last year. And so I did reduced hours for my employees, but they were able to get support because I had made that step to become an employer. And then the EDL, I didn't get any support for my business financially until July. My first one was a $250 grant from a local founding company. And I was elated. I was like, Yes, marketing a postcard, I was so excited for that $250. And then I did get an idea loan late, late July that I have not spent I'm sitting on it, because I don't know what the next few months will hold. But those are opportunities that I'm grateful for. Because as a small business owner, we would have never had the opportunity to have access to some of these funds and financial relief no matter how big or how small. And so I'm very grateful for that. And then lastly, you know, we started coming back a little bit, Memorial Day, July ended up being bigger than last year, which I was shocked. But it's really a subset of clients who are traveling locally, they go to their boat, you know, on weekend trips. And they've really kept us going. But in July, I felt for 1000 reasons, gratitude that my business was validated and that we were going to pounce back just fine.
Collin 23:37
Yeah, you talked about having to come in immediate expert on the alphabet soup of help, or whatever it was, it was a it was a scary, it was really scary and unsure. But, you know, you you went through it. And now like, if you dug into numbers, and you really understood the business, it's like that's an awesome footing to be on moving forward.
Carmen Chávez de Hesse 23:58
It's a great footage, and I look at it even you know, did I really need to log in? Maybe not. But how else can you build credit worthiness with the SBA? You know, and same with the founders first that gave me the $250 grant. There are people that could I can pitch you know, our future franchise opportunity to them. And, and that feels great. And actually the founders first was really looking for moms and daughters and entrepreneurship. Ironically called the kiddie fund. That might have helped a little bit.
Collin 24:33
Like I've seen all these stars aligning.
Carmen Chávez de Hesse 24:36
But you know, I did I do have to say that for me. You know, what's really important that my clients knew that we were going to follow all the CDT guidelines that we were here to support them and most importantly, we were going to remain flexible to meet their travel needs in the uncertain times. And we waived all of our cancellation early return fees through the end of the year. And I'm usually really flexible on that kind of stuff Anyways, I'm not going to get hung up on it. But things happen, people plans change, and they have changed a lot. And I only had one situation where I had to refuse to see a client when they came back from Brazil. Unfortunately, his mother was sick. And she passed and we specialize in long term kidney care to and this was a long term client, we had the kiddies for more than a few months. And you know, and that that was kind of hard, his kid he had a new diet. And so I just I videoed my whole process for him. But I had to make sure that I'm keeping my family safe as well. And so we just follow all the protocols. But in the end, I think we're all going to be just fine.
Collin 25:46
So what how is business right now? And what does it look like moving forward?
Carmen Chávez de Hesse 25:51
So again, my long term clients really helped my business I we dropped in September, like most September's October shaping up pretty well. I have Thanksgiving coming in, but I'm really unsure. And I think the whole country is unsure and uncertain. And until we get through, the election in California is on, you know, potential lockdown today, actually, again, so it's it, we're all trying to juggle it, we're trying to juggle the homeschooling, distance learning and all of that. So I think the only thing any of us can do is to remain flexible, and jack knowledge that difficult situations that might come up, whether it's us or our clients is just all part of this exterior world that we're in right now. And we have to give ourselves grace. And we have to give our clients grace when it's needed.
Collin 26:39
But that is so important. Realizing that all of this stuff going on outside that's outside your control, right? Look at to what you can influence and it starts with starts with giving yourself a bucket loads of grace every single day and understanding for what's going on.
Carmen Chávez de Hesse 26:55
And my employees are wonderful, and they are with me through feast or famine. And if I need a day off, you know, I have them to come in and support me for that. But for the most part, I'm, I'm you know, running at all right now,
Collin 27:10
you've mentioned it a couple times. And I did want to talk about franchising with you. Because you have a background in franchising, it's something you focus on currently. So what is maybe explain your background in franchising a little bit more?
Carmen Chávez de Hesse 27:23
Sure. So I've worked in the franchising and multi unit operations for close to 20 years. And, and I love it because a lot of times it's all about new business. And it's about growth. So I'm probably a growth strategist through my other consulting business, which is called eco growth strategies. But I really helped shorten the learning curve and guide my clients through the franchise process by teaching them the best practices in franchising, and coming from a strong operational background as a director of operational for a really large franchise organization here in San Diego, absolutely. We're holding company of several different brands. I tried to inject that operational perspective to help companies that want to enter the world of franchise, gain a really strong foundation operationally, systematically, and also to come out with a fair offering, which is called the Franchise Disclosure Document. So that's, that's really how I've kind of niche that I've also helped people looking to buy a franchise with a non biased opinion about that. That Franchise Disclosure Document, because they say we speak our own language in franchising, you speak franchising once you get into it. And it's, it's not always easy to understand. So if I can come in and just kind of break it down for people, it really helps.
Collin 28:53
Yeah, and I think one of those initial questions that come up about, you know, why would I start a franchise versus just another location or new location in an area?
Carmen Chávez de Hesse 29:04
Yeah, and that's a that's a really good question. And the very short version is you don't want a franchise unless you already have two or three locations. So they're both they're both business models towards growth, right? So I think if you're, especially if we're talking to pet sitters, and they want to grow, and you know, I could look at San Diego, we have 30 zip codes. So what I tried to look at the demographics within each zip code and try to grow that way, or am I going to look at a certain territory with maybe a 10 mile radius, and I'm going to look at it that way. So I think the most important thing for anybody wanting to grow and you can grow corporately. While you're franchising. I want to make sure people know that just because you're franchising doesn't mean you can't have five or six of your own locations. No matter what they be, you can still do both. So But you have to be really clear and concise about what those business entities look like. And make sure that if you're growing into another territory, or you want to align with somebody in another territory, that it's running as its own entity, because that's going to tell you whether or not a franchise is going to work. You have to have proof of concept for a franchise to work
Collin 30:25
or not another distinction that there is is is this franchising versus licensing. So what is that distinction?
Carmen Chávez de Hesse 30:31
Yeah, so, like I said, and that would be one other thing I would say about the franchisee before we go on to that point is that franchising as a business model also allows entrepreneurs to grow with other like minded entrepreneurs, and investors, so you're growing with other people's capital. So that's a real attraction to franchising, because you're able to scale that way. No, stepping back to the franchising versus licensing, I'm so glad you asked this, because it's often confused. And I do have licensing clients as well as franchise clients. And I do need to disclaim I'm not an attorney, I'm not a CPA, you know, none of that. I'm an operational consultant and a growth strategist, licensing. And where the concern comes in is if franchising is highly regulated, industry, and legally and lots of times, if you have a license that really looks like a franchise, you can be deemed, especially in the state of California, as an inadvertent franchise. So to have a franchise, you have three things going on, you have a strong brand, and a national trademark, you have detailed systems and processes, which is your secret sauce, usually an operations manual. And you still want to gain keep a lot of the control over how somebody is going to run that business. And you do that in exchange for your coaching and your support of the network and your marketing, all in exchange for the ongoing royalties and fees. Licensing really doesn't work that way. It's a lot less expensive. But licensing, you're virtually giving up control. So right away, if you're somebody that wants to know like, I would never licensed slinky cat, because I want to know that everybody's doing cat care, the slinky cat way. So licensing is already off the table for me. So licensing works, if you have a train the trainer model, it might work for you to know, trainers, dog trainers, probably more than petsitting. But it's not really going to work for pet sitters because you can vet them and you can still train them. You might give them a business in a box sort of thing at a different level. But then they're pretty licensees are pretty much on their own. And you might have a renewal or something in there. But again, it's you need to talk to a franchise attorney to make sure your licensing agreement doesn't say franchise all over it.
Collin 33:08
Yeah, I think, yeah, that distinction of control. Because I think, you know, when I think of licensing, someone may license the name effectively to put it on a billboard or put on a van. But they operationally as you mentioned, like they're completely different. And they're just using the name. But if you want more control more repeatability of processes and procedures, it sounds like franchising is really that. That's that distinction.
Carmen Chávez de Hesse 33:31
franchising is the way to go. And it's, you know, it's, it's not cheap. It's not cheap at all. But it's the way to go.
Collin 33:41
So on the way when we talking about cheap, not cheap, like how much money like what is that cost for franchising.
Carmen Chávez de Hesse 33:49
So any good any good consultant or franchise attorney is going to tell you that you're going to need upwards of 250 grant in order to launch a franchise. So and I really caution on this one, especially, you know, as as I've grown and I've helped different brands launch into the world of franchising, because you don't eat any business you don't want to come in underfunded, whether you're whether you're trying to grow to a second location, your second location is more important than your first one, you got everything on the line. So you want to make sure that it's successful, but you can't come in underfunded and I think, you know, petsitting we can come in on a pretty, pretty low initial investment to really start to get things going. You still need to invest in the marketing and this in the systems and everything that you're doing is as you're growing. But as a franchisor I think what people don't understand this is a whole separate business. So now you're going to have XYZ petsitting LLC, and now you're gonna have x y z pets franchising LLC or corporation. It's a whole nother business. So the thought that franchising is just going to Bringing reoccurring revenue through royalties is a huge misconception. Your learning curve to learn the world of franchising is going to be really steep, and very costly. Because you're going to fall in love with attorneys, you're going to have HR attorneys, you're going to have trademark attorneys, you're gonna have a business Attorney for the corporation, not to be confused with the franchise attorney, you got to have someone you can't have a business attorney doing your franchise docs, it's just never gonna work. It's never gonna work.
Collin 35:32
So that was my question about what that money goes towards. That sounds like it goes to a lot of attorneys.
Carmen Chávez de Hesse 35:38
Yeah, it's a it's a highly regulated industry. And it's overseen by the Federal Trade Commission or the FTC. I think one of the beauties of franchising, though, I don't want to scare people off in this either, but it's one of the only industries where a potential business owner can evaluate apples to apples, no matter what the business offering is or what industry it is. So I could be looking at a yoga studio versus a doggy daycare, which actually are almost identical business models. But I could be looking at a franchise in either one of those spaces. And through the Franchise Disclosure Document, which is the FTD, you can compare apples to apples on those two businesses. So it's the FTD is comprised of, like 23 exhibits or chapters that tell you who the people are behind the brand. Who the executives are, if they've ever had any litigation, how much your franchise fee is going to cost, what's the initial investment to open a location and entity of a brick and mortar, whatever that might be? What the You know, requirements are between the parties, the obligations, what your training is going to look like. It goes what your territory is, it goes through everything. And it even includes a copy of your basically your sale agreement, what you be signing in your franchise agreement, and a copy of the table contents of the operations manual, which is usually 350 to 500 pages, depending on the brand and and so that initial investment in franchising goes towards the formation of that as well as your strategic analysis to get it to get launched your operations manual which could cost upwards of 20 grand alone. And not to mention website, you know, PR marketing everything to get ready to sell franchises.
Collin 37:35
Sounds like a lot of upfront work, right? Getting all your ducks in a row getting everything lined up. So if someone's interested in that, what are some of the first few steps that they should take to put themselves on the right path?
Carmen Chávez de Hesse 37:49
Yeah, so I think they need to start looking at their flagship location as if it was a franchise. So how detailed are their systems? You know, when I help the pet groomers launch into the world of franchising, they didn't have an operations manual, I went around their salon a took pictures of sticky notes with their systems and processes were everywhere. You know, I literally, we started from scratch, they had it all somewhere on their war board in their salon or whatnot. But you really need to start looking at it as, as how is this vehicle operating? And furthermore, how am I going to duplicate myself so that I can step away from this business to run the franchise business. And if I can't run the franchise business, I need to up my budget to hire either a fractional consultant or somebody in franchising to take those reins. So but it's running your business, you have to duplicate your business and you have to duplicate yourself in order to franchise so that's really going to come to I we do like a corporate readiness evaluation. And it's a questionnaire and we really look at who would be leading the ship. How is the division of responsibilities? Where are the gaps in my team? How would we offer support? We are no looking at if it's a space it franchising is gonna tell you, you know, what color of the baseboards, you know, what are my Well, the initial investment in office supplies, I mean, you're going to detail all of that because franchising, I can't say people are buying a business in a box in franchising, they're buying the right to hopefully duplicate somebody else's already successful business. Yeah, but the success or failure of a franchise is going to be highly dependent on the entrepreneurs coming in to run that location. And they're not reinventing the wheel they're being they're paying a lot of money through franchise fees to be able to have all these systems offered to them. So you need to have that dialed in and there's a lot that people can do tomorrow to start preparing for it.
Collin 39:56
Yeah, sounds like just start writing things down that you do. Right, and that you would want replicated
Carmen Chávez de Hesse 40:02
exactly in the best opportunity to do that is in a second location, right? Because if you can shadow your own opening of a second location, you're taking note, how long did it take me to secure the least? If it's a brick and mortar, you know, if it was a pet sitting, you're going from San Diego County to Orange County, how long did it take to get the first clients ramp up the business, you know, to map the territories, and you're looking at it from that sort of mindset. And the other thing that you really need to know before you franchise is your numbers. And in franchising, it's not like buying a business, you're not going to give somebody your p&l, you're giving them an opportunity to have potential success doing business like you have. But you still need to know what's that going to look like. So if I walk into a grooming salon, I would say so how many visits did you do last month? And, you know, and they'll tell me, and then I'll say, Okay, then I figure out what I think the average cost is that where the groom is, and I know about how much money they're grossing a month. That's it, it can be as simple as that. But when you franchise, you really need to do financial projections towards the what a franchise could earn, when their breakeven is what your key performance indicators are. You need to do that for a potential franchise. And then you need to also do it for the franchise or company
Collin 41:31
giving some just some idea of because you're giving them your secret sauce, that operations manual thing, if you implement this and you implement it. Well, this is what you should expect to see or you know, could be coming on the back end.
Carmen Chávez de Hesse 41:43
Yes, but I'm never gonna promise you that.
Collin 41:45
Yeah, exactly. No promises.
Carmen Chávez de Hesse 41:47
Yeah, it's gonna be highly dependent on your ability as a franchisee and your coach ability. If you're not somebody that's coachable it Likewise, if you're a franchisor, that really wants to have excessive control, franchising is not for you. Because there's still some sort of autonomy between the parties, between the franchisor and the franchisee, you want them to be independent, because they the contract says that they're independent business owner, but yet you want them to be have some level of coachability to follow your procedures. It doesn't mean that if you have a franchisee, who's a really good entrepreneur, he can't bring some best practices to help grow the whole network and franchising That happens a lot. But if you can't, you know, Coach somebody right out of the gate for that, and it's gonna be really hard in that relationship. Likewise, if you want to just pick up the phone and say, hey, you're not doing what I said you were supposed to do, you don't really have a lot of authority in franchising to have the conversation that way.
Collin 42:47
What's the process look like to actually getting a franchise implemented?
Carmen Chávez de Hesse 42:51
Yeah. So the whole process I want to be clear can take several months, just from the legality standpoint of formulating everything, but when you talk about the actual process, I'd like to go back and credit my good friend Lonnie Helgerson, he wrote a book called Five pennies. It's the 10 rules to successfully build a franchise, it's a valuable book for anybody looking to enter the world of franchising, when he wrote it five pennies was really the value of the royalty, because it used to be 5% royalty, it's closer to six or 7%. Now plus marketing fees and other things, but it's called Five pennies. It's available, I'm sure on Amazon. But he talks about the franchise process being a four phases, the strategic planning, where you're doing, you know, the budgeting and the financial projections, looking at your systems and your network and your support. Then it moves into the franchise formation which is actually building the FTD in the legalities of what your franchise system is going to encompass the fees all of that. And then you're into the franchise launch and growth phase where you're going to look at what is your strategy for growing How do you want to grow? Where do you want to grow first, your marketing dollars PR and then looking at development, franchise development refers to sales. Are you going to sell yourself or are you going to bring in somebody else to sell and then the phase four is when you really made it is when you're onboarding and opening your first franchisee? And what is all of that look at? How are you going to hold your universities and plan to support a new franchisee through the entire onboarding process
Collin 44:41
sounds like a really neat resource. I'll have a link to that in our show notes so people can go click right to that for sure. Because that's that sounds, those those four steps, you know, really sounds like this planning, having these processes and then that exciting time of when you bring your first person on. There's still there's still a lot of work. To do after that,
Carmen Chávez de Hesse 45:01
yes. And the in the formation you're doing a lot of in the formation because that's when, you know, you're really looking at the ops manual yoke and the franchise operations manuals different than a standalone ops manual because there's so much legal ease in franchising, so a lot of its disclaimed in there. But the franchise operations manual is really the secret sauce of the business. And the training and, you know, that goes along with that. And, you know, it's exciting I love being at the franchise universities, and I'll never miss the franchise grand opening because it's such a milestone for everybody for the franchisor and the franchisee, so it's just it's a positive experience.
Collin 45:46
Are you a member of pet sitters International, psi is the largest Educational Association for professional pet sitters and dog walkers with a mission to promote petsitting excellence through education after the tumultuous past year. Having the support of a strong community and direct access to educational resources and business tools is more important than ever before. As we rebuild our businesses in 2021 psi is here to help with a free monthly member toolkit, monthly bonus resources, online trainings private number group and more combined with a group rate uninsurance and background checks. psi is our one stop shop for everything you need for your pet sitting or dog walking business as an Educational Association. Psi believes that if you know better, you'll do better and invites you to join 1000s of other like minded professionals who are committed to offering the best possible pet care services and elevating our industry. If that sounds like you visit pets.com to learn more. our listeners can save $15 off their first year membership by using the promo code PSC 15 at checkout. What makes a good franchise what what makes one successful?
Carmen Chávez de Hesse 46:55
Yeah, so again, well funded, clear, clear communicators. And not everybody is a Cinderella story in franchising, like Massage Envy club Pilates, it doesn't happen overnight. So it's really the Slow and Steady is gonna win the race in franchising, and you, you need to be able to support that growth over time. So having a good strategic plan on how you're going to achieve that. Being well funded, being super supportive, having a really strong support network for the franchisees and investing in training. I think where a lot of people, the franchise ORS, at least I coach is the franchise, ORS have a university, like McDonald's has a hamburger University. So, you know, basically, you're signed the franchise agreement, that's the most exciting day for somebody, they just paid 35 to 40, maybe 50 grand on a new business idea. That's such an exciting day. For them, the day of greatest uncertainty is the next day when they're like, now what do I do? So a good franchisor is going to have that plan nailed. And they're going to have that preopening down. They're gonna really invest in training to the extent that when you go to training as a franchisee, you're confident you're going to be able to go back and open your store tomorrow, for your business tomorrow. And I think that's where, where it has to the relationship is so important. consistent communication, consistent support, great tools, and all that comes from a well funded organization. Yeah, you can't, you can't launch as a franchisor and be dependent on that 3040 grand coming in that money is what you spend to get that location open. And the royalties are your revenue, but those aren't gonna start coming until a few years down the line.
Collin 48:59
Yeah, it sounds like there's a lot of personal onus if you're wanting to start this like okay, like what am I up for coaching? Am I up for giving this guidance? Am I up for providing this support? Because if you're not, it doesn't sound like it's a good fit.
Carmen Chávez de Hesse 49:14
No, and if you're really busy running your own locations, you can't do it all you just can't, something's gonna gonna fall and discipline systems breed freedom. So you're really looking at your team, right? Who are your key employees that are going to support you in both of these entities, your corporate flagship locations and now this whole new entity that is franchising and you have to franchise it, the reason why they start a whole nother Corporation usually is because the initial deposit is audited on an annual basis or your books are audited on an annual basis by a CPA. Every time you have to renew your Franchise Disclosure Document, so it's people will tend to just open a new entity they'll fund it as They're going through the Franchise Disclosure approval process. And it just makes it really clean. Because if you've had a pet sitting business for nine years, and now you want to franchise it, and they're going to want to go through all your books or or, you know, a better scenario, do you have a brand that you want to sell things to your franchisees? A grooming shampoo, something like that, you know, you, you want to be able to make money on that in the franchise network. So you're gonna have a corporate entity that holds your flagship locations and everything else you have going on, and then you'll have the franchise entity that just basically receives income from franchise fees and royalties,
Collin 50:43
then go back and investing that back into running an operating and guiding and training those, those those locations.
Carmen Chávez de Hesse 50:51
And it's not to say that you're not going to steal from Peter to pay Paul, if you have really successful corporate locations, they're probably be funding the franchise at some point, you know, but that's why you know, a CPA is on that is on that team as well.
Collin 51:05
I'm thinking about this, you know, who should could be considering a franchise over a new location or something.
Carmen Chávez de Hesse 51:11
So I would say a business that is already duplicating what they've done with great success. So they have proof of concept. So if they're a petsitter, and they're running three regions that are like standalone region, whatever you want to call them, territories are running as a standalone region, you know, they would be in a good position to start to evaluate a franchise offering and in franchising isn't just to take you nationally, you really want to have a strategic growth plan that kind of keeps you close to your area. Because you're, you kind of think of like a hub and spoke model where you can pull your resources, even between your corporate locations and your franchise locations, you should still have a centralized marketing that supporting everything else going outwards. So you don't want to be in California and open your first petsitting franchise in Chicago. It's not a market that you know, and well, now you can't even travel there. Well, maybe we can now but you know, there's some limitations there. Yeah. So you know, first and foremost, you need to have that proof of concept. And I and I learned this the tough way, it's actually a restaurant that I supported. I came in after they were starting to franchise, eight years in a B location with year over year growth in a restaurant, they had longevity, a phenomenal brand. They had so much going for them. But we and we were pulling in franchise sales leads from across the nation, internationally, people that owned multiple subways and other other big franchise brands. And they couldn't see the proof of concept. And we knew in in a location, the numbers would have even been better. But at the end of the day, they they had to stop franchising, just to open that second location and take a step back from it. So you know, like I said, it's heavily regulated, it'll, there's 31 states that don't require registration of the FTD. There's 14 states that do California is one of them, it's very difficult to get franchise approval on California. And New York is really tough Washington State and DC. You know, some of those states will mandate that if you're not well funded that the initial franchise fee goes into an escrow account and tell them businesses open. Wow, that's holding up all the capital that you need to get them open. Yeah, you know, so, you know, having a really strong franchise attorney that's well connected in your state, is hopefully you're standing there's a lot of them that work nationally, I have a great referral list. If anybody needs it, then they'll provide a consultation on the legalities of it. But yeah, it's highly regulated, you're renewing every year. It's full disclosure, full disclosure. So your finances are disclose any lawsuits are disclosed all of that it's a contractual relationship.
Collin 54:14
That sounds like something to enter in with, you know, open eyes and open you know, ideas of the possibilities if you already have that second, third, fourth location that you have repeated success at or you have your systems in place, I think you really need to get those systems written down in place that manual done, and then start looking around and going, Okay, is this something I could hand off to somebody else and have them you know, implement this if they and take it somewhere else beyond that?
Carmen Chávez de Hesse 54:44
Yeah. And, and I think people have to be really careful because we all have that person. Oh, my God, I love what you do. I want to do what you do. Can I do what you do? Where are you where you do it, basically, you know, and and so you get this kind of interest and you're think you come to the table thinking I only have five people The law my business. But you know, one of one of the problems that I had initially when I pitched my hotel idea to my husband was, were we going to get that kind of money for the initial investment because I had done the initial investment just like I would for a franchise. So you know, you're putting you're considering initial investment in franchising is considering three months of operational expenses, all of the build out, if it's a brick and mortar. All of the training insurance, every fee that you could imagine for initial purchases is included in there. So it's, you're going aggressive on it, you hope to open it for less. But again, you know, you don't want to come in underfunded.
Collin 55:40
Yeah, be well funded, have a good plan sounds like two best things that you could do to get on the good path.
Carmen Chávez de Hesse 55:47
Yeah, and I think the people that come up and show interest aren't fully understanding all that you've invested. Because you can Oh, yeah, I started this business for under, you know, 10, grand, 20 grand, but now you've been running it for nine years, your investments been a lot more than that over time, and you've had a commitment to marketing. And that's why there's so many ways, when I coach businesses that don't want to franchise so many ways, ways to get it to run like a franchise. So you know that every month, you're going to dedicate 3% of your gross revenues towards marketing. And then this is your marketing plan. So there's there's so much planning and detail that goes into it, but that's how it can operate and other locations. With the same sort of consistency that people look for in a franchise like McDonald's. subway, you know, you know that the look and feel every time you go into a franchise location, even our doggy daycares that are national, you know exactly what you're going to see when you go in there. And the and what you're going to expect in terms of customer service.
Collin 56:50
This has been a fascinating conversation, Carmen, I have loved hearing all about the world of franchising and breaking down some of these misconceptions and some notions that people may have and to see if it could possibly be a good fit for them and, and to hear how slinky cat is is panning out and the wonderful world of getting to work with your daughter and pass something on to her for for the future. I know we've covered and we've covered so much in so little time, but there's a whole lot more. So how can people get connected and follow along with everything that you've got going on?
Carmen Chávez de Hesse 57:25
Yeah, so I so appreciate the opportunity call. And thank you so much. And I know that I put a lot out there. So I want to make it easy for anybody to reach out to me regarding franchising or cat. So simply text franchise to 619-865-9476. And I'll shoot you my eco growth strategies website, and anybody that would like to have a franchise conversation and mentions, they heard it on the podcast, I'll give them a 20 minute consultation to kind of figure out where they're at and what some net good next steps might be. You want to top cats and operations in general, then just text me out to 619-865-9476.
Collin 58:13
I love that. I love that so much. Thank you for that. And we'll put links to those numbers in the shownotes. And on our websites, people can click right on those and, and get connected with you. So Carmen, this has been a real joy. A real pleasure. Thank you so much.
58:26
Thank you, I
Carmen Chávez de Hesse 58:27
sure appreciate it. Take care.
Collin 58:29
We all want growth and security in our business. And that's going to look different for everybody. So determining if you should franchise depends on how you want to run your business. Ultimately, how much control do you want? What do you want your days to be spent doing? Carmen did a great job of breaking down not just the financial and the legal obligations that you have if you go down the path of franchising, but also the importance of coaching of mentoring of selling the franchise and being still involved in the business and willing to put in that work and help others realize their potential and running that side of the business as well. If you ever thought about franchising, or going into a franchise operation with somebody else, we'd love to hear from you and what your experience has been. You can email us at feedback at petsitter confessional calm. We're on Facebook, Instagram all over the place. That pet sitter confessional and we'd love it if you could call us that way we could play that voicemail on the show you can call us at 636-364-8260 still had to look that up because I don't have it memorized yet. We want to thank our sponsors time to pet and pet sitters international for making today's show possible. We hope you have a wonderful rest of the week and we'll be back again on Monday.
