AI Killed Our $1.7M Business - How I Rebuilt with Franchising

This is a transcript from Episode 8 of The Franchise Champion Show. Listen to the full episode on Apple Podcasts, Spotify, or YouTube.

Alan Regala: Our next guest is a national champion in her sport. I'm not going to tell you what that is yet, but I can tell you that she can kick my butt. And she also helped turn around a struggling franchise business. I'd like to welcome to the Franchise Champion Show, Sarah Wills with Spray-Net. Welcome Sarah.

Sarah Wills: Hi, it's great to be here.

Alan: Yeah, thanks for joining us. So tell us, Sarah, what was your background before entering the exciting world of franchising?

Sarah: Yeah, so before this I was actually a vice president in the IT consulting world in a small scale consulting business. And I have also had experience as a general manager in a large restaurant chain, and I even have a background in some scientific research. So a little bit all over the place before getting into this field.

But my dad is a chronic entrepreneur, so I have seen him start and run many businesses over the course of my life. And I guess you could kind of say that having my own say in the way that my company is being run was kind of laid out for me from a long time ago, just because that's the model that I had always seen—was to work towards having your own thing. But I also have a really strong appreciation for process and process improvement, and I love being able to build off of what other people have learned from. So the concept of franchising was very appealing for me.

Alan: That's great. That's really cool. So tell me a little bit about—you grew up with your dad being an entrepreneur. Like what was that like? You know, what sort of businesses was he in?

Sarah: Yeah, so him and my mom started a small company a long time ago and it didn't go great, so he decided to go into working for other people again. But it was always a very strong drive of his to have his own business. And so fast forward a few years later and several siblings later, because I am the oldest of seven kids—

Alan: Wow!

Sarah: And so it was a lot of difficulty because he needed a lot of stability due to the size of our family. And we were moving a lot to try and chase down jobs and contracts because he was a contractor. He became a certified Scrum Master after getting disillusioned with the concept of traditional waterfall.

Alan: Okay, waterfall Scrum Master—really briefly, I don't know what those mean. What does that mean?

Sarah: Yeah, sure. So they're two different ways of process improvement in software development. My mom and my dad both worked for GE for a period of time, both in applied areas as well as in software lifecycle development. And my dad wanted to help people work better together and to find better systems and better processes so that we could build products faster and improve employee retention and have everybody be happier as they went through that process.

So waterfall is the old way—you would set out an idea of where you wanted to go with the project and you'd say, "All right, here's our plan for the next four years." Four years later, you would look up and you'd be like, "Oh no, we missed. Okay, I need another two years. We need to make some adjustments." So they're very well known for being behind schedule. And Agile evolved as a different way of doing that.

So in Agile you do short sprints, short iterations. So you'll have quarterly planning—a few times, four times a year—you'll basically check the direction and be like, "Is this the way that we want to go?" And then you break that down into smaller chunks of work. So you plan out your work in weekly or bi-weekly sprints, and you basically are stopping and checking the map and making sure you're going in the right direction frequently. And then you don't end up being several years off schedule. You actually start—people were able to finish way ahead of schedule because they were checking and doing retrospectives to look back and see: How can we work better together? How can we improve this process? And are we doing the most important things? Like, does this even matter anymore? Will the consumer even want this anymore? Really important questions.

And it helped people to work better together and it improved time to market as well.

Alan: Yeah, yeah, that makes sense.

Sarah: So my dad wanted to get certified in that because he thought it was a better way of doing things, and I agree with him. But the problem was that when you teach people how to use Scrum, once they master those tools, they don't really need you anymore. So it's like a six-month contract, an 18-month contract, that kind of thing. So there was a lot of job hopping going around because he worked himself out of a job by teaching people how to do this.

Alan: Interesting.

Sarah: Yeah. So that's basically how we got started on the consulting company. He wanted to find the contracts himself and find them for other people as well. So I started out as being the recruiter and worked my way up in that company. We were able to take that company to $1.7 million in revenue in 2020. So that was really cool to see a company going from the ground up.

But then with the advent of AI, we started to see a significant decrease in the demand for Scrum Masters because people would ask ChatGPT, "How do I use Scrum in this situation? How do I use Agile in this situation?"—which Agile is the overarching umbrella that Scrum is under. And it wasn't just our company, it was a whole lot of other companies as well. Our competitors were all down about 98%. So AI hit like a sledgehammer.

And it was around that time that I got introduced to the concept of Spray-Net through our family friends, Jeff and Josh Gift, and they were looking for a salesperson who could help them get this franchise off the ground. And I was looking for something more AI-proof where I could utilize the skills and knowledge that I'd gathered as officially a certified Scrum Master and a certified Scrum Product Owner to help with process improvement. We used that at our old company in over 12 different sectors—for people in the finance sectors, in the aviation and aerospace sectors, in the banking sectors, in railroad sectors. All sorts of different sectors were able to benefit from this thing that was originally created for software improvement and development. And so in my mind I was like, "Well, I mean, a painting company is just another area to have this work in."

Alan: Yeah, yeah. So basically you helped with the building of this IT company and brought it up to $1.7 million, which is amazing. That's fantastic. And then AI comes and it's like, "Oh, dang." Big difference.

Sarah: Big difference.

Alan: So I know a lot of people are concerned about that with their positions. I mean, maybe they're working for whatever corporation they're in as a developer or whatnot, and there's always this potential for their job to be no longer needed by the organization. So this is not uncommon, and it seems like it's just going to be more common as we move forward. Then you had some friends that were like, "Hey, we could use your help with helping us with our business." Is that sound right?

Sarah: Yeah, exactly. Yeah, so family friends needed some help on the sales side. I do have some background in sales as well as in management, and obviously... And so I was like, "I'd be happy to help out for a little bit." And the more I learned about Spray-Net, the more I really liked the product and felt that Spray-Net's ability to provide a factory finish on site for a client as an alternative to replacement was not only AI-proof, but I also felt that it was a really smart choice in today's economy because people want to have a beautiful home, but they can't afford $30,000-$40,000 to get new cabinets. And a cost-effective alternative to that that's not going to fall apart in a year or two sounded like a really smart choice just for the average consumer.

And so I was like, "These coatings sound cutting edge. I love that they have such a strong focus on customer service," which I obviously have a good background in, and I think it's a huge differentiator in the trades to have an excellent customer service experience from your painter. And I made the switch.

What is Spray-Net?

Alan: Okay, so we got to take one step back. You need to tell us what is Spray-Net and what do you guys do and how do you impact the lives of your clients?

Sarah: Yes, so Spray-Net is custom chemistry and smarter painting. And basically we give you an HGTV finish without the price of brand new cabinets. My franchise currently mostly focuses on painting kitchen cabinets with a 15-year no-peel warranty. We pride ourselves on providing an actual factory finish, so you're not going to see brush strokes or bubbles or peeling or severe chipping within a few months. These are all things I've seen from traditional coatings.

We have a chemist on staff that has worked with our CEO over the last 16 years to provide customized solutions depending on what we're painting. So whether that's kitchen cabinets or we also do exteriors, he's got a customized solution for vinyl, which is rare because normally if you paint vinyl, it will melt. And he found a solution to that. We paint—well, we stain brick, which is again not common because you will normally with traditional paint see the brick flaking off after just a couple of years because traditional paints when applied to brick destroy it by locking in the moisture that's there, versus our stain allows the brick to continue to breathe and function the way it needs to.

He then developed a stucco coating as well that can fill in fine lines and cracks and expand up to 200%. Basically, our CEO brought this chemist on staff and said, "There's so many frustrations and problems in the painting industry—go fix them. Like, you've got a degree in how to make this stuff work." And our chemist did.

And so they've been applying that to substrate after substrate after substrate. The newest one is our roof coating called LiquiRoof that actually came out of—we had clients asking if we could paint their roof because they didn't like the color. And our chemist came up with a solution that's actually twice as strong as traditional shingles and better at puncture resistance, wind resistance, all of that, while being significantly lighter and less than half of the cost of traditional roof replacement. So along the way, he's not only come up with a higher quality way of doing each of these things, but it's gorgeous as well.

Alan: Wow, wow. That's really incredible. I mean, there are so many unique things, unique options that Spray-Net has for their clients that are—I mean, this isn't just like, "Oh yeah, I'm a painting company, like I'm just going to get my stuff from Sherwin-Williams or from Home Depot or wherever," right? Like these are all patented products that you apply that no one else has.

Sarah: Yeah, I have a background in scientific research, so I'm familiar with the rigors that it requires to get a patent, for example, and also with the rigors of the scientific testing that they've utilized on our coating when comparing it to other coatings. And that was something that drew me to this company versus others as well—is that it's truly a market differentiated item and it is a smart choice for our clients. It's not just the top shelf, it's also affordable.

Alan: Yeah, this is one of the things that really drew me to Spray-Net was this moat that they have around the products that they provide because nobody else has these things. And what's really cool about these is that they're solving problems, right? Like this stain for brick, for example—it's not just, you know, anyone can just go and apply a paint to it, not even knowing that, "Oh, we're actually destroying their house."

Sarah: Because if it's already painted, I can't help you, which is unfortunate.

Alan: Right, yeah. But you guys having this ability to change the color of that brick and allowing it to breathe and not destroy it, obviously is really important. What you guys are doing for the factory finishes for cabinets—I mean, and being able to do it on site.

Sarah: So we do the factory finish. We bring in air scrubbers, we bring in dehumidifiers, we have a Festool sander, which is a sander with a vacuum attached to it. We mask everything off very professionally. Like we replicated and reverse engineered the factory finish and found a way to do it on site for the client, which is how we're able to keep some of those costs down while still actually providing a factory finish.

Alan: That's so cool. I mean, that's amazing that—I mean, that's great that you guys can come to the house and do it while it's there. And I just use plastic and, you know, shield off the rest of the house from getting, you know, sawdust and all the other stuff.

Sarah: Yeah, it's a lot of masking, a lot of prep in order to be able to do it right. And then of course we disassemble everything before we start. We sand everything, we degrease everything, we prime everything, and then we have two coats of our cross-linking polyurethane, which if you know anything about paints, that's the best of the best. Provides durability, flexibility, chip resistance, stain resistance, and scratch resistance while also being peel-proof.

Alan: Yeah, that's really cool. Yeah, this excites me. You know, there are a few things about different types of businesses that excite me, and this is one of those things—is just having proprietary technology. You know, proprietary products, very different. And it's just something that no one else can do. So it's easy to stand by a brand and to represent your brand if you have something no one else can do. And it's at a price point that is reasonable and people can get excited about, and obviously it's going to solve their problem. That's fantastic.

The Franchise Turnaround

Alan: Cool. So okay, so now you've told us again what Spray-Net does. Tell us a little bit about this transformation that happened. Like what were you seeing before, and then once you got involved, how did you turn things around?

Sarah: Yeah, so when I first got involved, I was just on the sales side of things. And then I started taking over more and more responsibilities because I have a lot of skill sets, and I was like, "Hey, I see that we have an opportunity here and I would love to help with this." And I ended up going full time with Spray-Net. And it wasn't long after that, the guys came to me and said, "We love the vision that you have and we'd like you to take over." And I was like, "Great, I'd be happy to do that." So we sat down, we had a discussion, I became part owner, and we put me in charge a year ago.

So there were a lot of adjustments that we needed to make. We had to address margins. We reduced the size of our team and increased their efficiency. I took a long, hard look at our marketing and made a lot of adjustments to that. I sat down and made user profiles for who our ideal customers are. Thought about: Where's their day taking them? How many times can I get in front of them per day?

I want the client that is going to be thrilled with us and is going to be able to afford us and probably going to save money by going with us—and not the person who's looking for a quick, cheap fix, but someone who really values a quality finish and who understands that you can either buy cheap twice or invest once. That's who I want to be in front of, because I want to be respectful to their time and to mine.

And so we also narrowed our scope. So we were looking at a split marketing budget on the interior—so kitchen cabinet—and exterior side of things. And I was like, "Until we get our feet under us, I want to just focus on one side of the house and treat these as different silos." So we narrowed our focus on just the kitchen cabinet portion and then went deep and broad with our marketing.

So we started hitting a lot of social media. So I run our Instagram, we also have corporate—they've got our Instagram and Facebook ads. We're cross-posting in different local groups. I made a TV ad for us, so we're on Spectrum Reach. We have some small billboards in local Harris Teeters. We partnered with Lowe's as pro vendors for them and now have our banners and brochures inside of ten different Lowe's around the Triangle.

Alan: Wow, nice. Wow, that's huge. That's great.

Sarah: Yeah, that's the Lowe's program has been really fantastic and it's awesome getting to work with them.

Alan: Can you tell us just a little bit about how that works as far as—yeah, just what does that look like from a franchisee perspective?

Sarah: Yeah, so let's talk about my ideal client, right? So probably my favorite Lowe's job I ever had was somebody who had 110 faces in their kitchen. And that's looking like four walls of cabinets as well as several different bathrooms of vanities. And they had basically been quoted about six figures to get all of those replaced. And then they walked into Lowe's and they were like, "Hey, we can't afford to replace all of these cabinets. Do you have any other options?" And they sent them to us.

So I came out there, took a look at everything. There was no water damage. They hadn't been painted before, so they were an ideal client for us. And I was able to give them a $26,000 quote, save them $75,000, and we were done within a week and a half versus several months. They high-fived each other on the way out. And that is who I want to work with, right? Is people that I can really save a lot of money for, provide that gorgeous factory finish, and save them a lot of time.

So that's basically how it works—is people that would like to replace but can't afford it, Lowe's can send them to us as an alternative.

Alan: That's great. That's great. Okay. Okay. Sorry. So continue on. You're doing all the marketing revamp, including the Lowe's partnership, which is fantastic.

Sarah: Yeah. We started encountering difficulties though with all the digital stuff. So I had some meetings with our marketing director, and Spray-Net hosts regional events as well as annual events to bring all the franchise owners together to brainstorm with each other. And at the regional event, I was like, "Guys, I don't know what to do. It's not working. Like I'm so stressed out. Like we are not closing very well. My closing ratio is in the toilet and we have no backlog. We're week to week. Like what do I do?"

And our marketing director was like, "In this world of post-AI, we are in a post-trust society. And what you need to do is let people know you're real. Like you can spend thousands of dollars on Facebook and it could be a fake person that doesn't exist reading a script that no human ever read. And people don't like that. They want to know that you're real. They want to know that you're down the street. They want to know that you're the kid's coach at the gym down the street," which I am.

And so she recommended that I switch to more traditional methods—so lawn signs and flyers and door hangers and postcards getting mailed to people with my face on it saying, "Hey, I live right down the street. I'd love to paint your house." Like, and so we made that shift.

And along the way, I took another big step back and I was like, "You know, what is my client really concerned with? What questions are they really asking that they're not actually asking to my face?" And that is: Is this saving money? Is this a good value for my money in a troubled economy? I want to make sure I'm being smart with this. Can I trust you? And will you treat me and my home with respect?

And so I was like, "How can I answer those questions better for my clients?" Obviously that starts with having that presence. So we did the door-to-door mailers, we did flyers, we are involved with different community organizations that benefit charities. So people started to really know me rather than Spray-Net.

And then I started talking to people about the different accolades that we have as a company. We've been featured on Netflix, we've been featured on HGTV, we are in filming for another really large company—I don't know if we're allowed to mention it or not. And then that obviously lets people know that we're trustworthy and we are the high end and that we are going to be high quality.

And then I also like to brag a lot about my franchise. So there's 60 franchises across the US and Canada. They're all known for their professionalism and their excellent quality products. But my franchise has received an award two years in a row for being in the top 10% as far as customer service goes. And so I started talking about that instead of just having it hanging on the wall, you know?

Alan: Yeah, yeah, that's smart.

Sarah: Yeah, and I've had the same crew. Like I mentioned, we shrank it some, but I've had the same guys with me for years. And so I let them know, like, "Go to our Google page and you can read our dozens of reviews and see the same names through each of those reviews. And you can really trust that it's me and it's Trey and it's Josh, and we're going to take really good care of you and your home." Like Rich and Jeff are fantastic too.

And so just building that trust, building that relationship with the client has been really helpful. So I went from a closing ratio in June of 10% to an average closing ratio of 55% for the last three months in a row. So it was 50 then 60 then 50 again. Went from week to week on jobs to we now have a two-month backlog.

Alan: Wow. Wow, that is incredible. That's huge.

Sarah: Went from like, "How am I going to keep my crew working?" to setting sales records two months in a row and on track to potentially do it a third. So it's had a really dramatic impact.

Alan: Good for you. That's amazing. Wow. That is a huge impact. And yeah, very—well, congratulations on this turnaround and all the learning that you've done.

Sarah: Thank you. It's been a team effort.

Alan: Yeah, I'm sure it has. But you know, it's interesting, you know, a lot of people—this is not uncommon, you know, for people to go and experience the dip, the low. "What do I do?" And have to get—well, the nice thing about the franchise system is you're getting support from other owners and other people involved in the system. I think this too is really where that athlete mindset comes into play.

Sarah: I think this too is really where that athlete mindset comes into play. And I think my franchise coach really understood that. He was like, "Before enlightenment you need to chop wood and carry water. After enlightenment you need to chop wood and carry water." And as a martial artist, whether or not I'm having a good day or a bad day, I still need to show up and train. Whether or not my match is going the way that I want it to go, I still need to do the next right thing. Whether it seems completely bleak or like I'm on top of the world. And having that mindset has been really crucial for me in these slower times and these difficult times to continue to still dig in deep, still give that excellent customer experience, still have faith in the vision that I have for our company even though it's hard and you feel like you're getting ground down.

The Athletic Journey

Alan: Okay, so you've broken the seal on the athletic background part here, which of course we love. And you know, I mentioned earlier you being a national champion in your sport. So tell us what that is and yeah, tell us more about that and how that's helped you with your journey in franchising.

Sarah: So I am the national champion for the sport of Sambo. That is a mix of wrestling, jujitsu, and judo. I've been doing Sambo for about two years. My sport of choice is jujitsu. That's the one that is nearest and dearest to my heart. I've been doing that for seven years. I also trained Muay Thai for two years, and I've trained wrestling and judo for jujitsu the whole time I've been training.

So I got recruited to Sambo just a couple of years ago because they saw some highlight reels of me in jujitsu spheres doing what looks like Sambo. So Sambo is very takedown heavy, it's very fast paced, it's very intense. And in jujitsu you can play the game like that—and I often do—but you can also play it in a gentler way or a more strategic way versus a more aggressive way. But I have a very aggressive style, so they were like, "Hey, you would do well at this."

So they invited me to come to the national championships this year, and I did, and I got to take that title. And then immediately put it to the test at the International Cup right after—they had the open weight class champion from the Philippines had come all this way and was uncontested in her division. So that got to be my first match as the national champion—was against someone about twice my size who had about 20 more years of experience than me. But I was like, "I'm the national champ. Like I'm going to represent. Let's go."

And I did lose that match on points, but I was able to almost get a takedown and I was able to sweep her, which means reverse her position once she was on top of me, which shocked even my own camera person who had to jump out of their seat to try and follow along. And that's when people really started to know me for my grit—and that even if the odds were stacked against me, I wasn't going to give up. I was going to keep fighting.

So then I went down to Ecuador and represented us at the Pan American tournament earlier this summer. And I am going to Kyrgyzstan in November to represent us at Sambo Worlds. So that is going to be really interesting.

I started martial arts at the age of 28, and I will be going against judo Olympians that do this in their offseason who started when they were four, whose parents were judo Olympians. So it's really interesting because when I started jujitsu seven years ago, I was 270 pounds. I've lost 100 pounds in seven years. I started this sport for self-defense—not to go become some high-level competitor—but I wanted to get better at the sport and I wanted to get better at regulating my own reactions under stress. And competition allowed for me to do that in a way that no other arena does.

And then I also just had so much empowerment and confidence come out of my journey that I really want to be able to give that to other women. And I know that the farther I go in any of these competition arenas, the more women I can reach. And so I want to expand my platform in order to reach other women with my story, because I started in my late twenties to learn to defend myself better as a very, very circular shaped person who had to be taught how to do a squat. Like I was not born an athlete, I was not raised an athlete. And I want to let women know that they can do more than they think they can.

Alan: Yeah. What an incredible story. I mean, you mentioned starting this with the weight that you were at and really like in so much later in life than most of the people that you're competing against, most of the people that are doing the sport—is incredible in multiple ways. I mean, first of all, just picking something up like this and learning something new, right? Like it's not like you were just developing this for so long. You just started this for one reason—self-defense—and then it ended up obviously you got good at it and you learned how to learn and learned how to train.

And I think there's a great parallel to this with people that are thinking about getting into business, you know, having one mindset of, "Well, I've been doing this corporate thing for so many years, right? Am I too old to do this other, this new thing? Starting a business or whatever. Maybe I'm too old." You know, they don't have the confidence. But I think this is a great story that just shows like people can still learn at really any age and you can get really, really good at things at any age. It's more of a mindset, right?

Sarah: Yes. Yeah, and I think part of that is from the Agile and Scrum approach. They teach you, you fail fast to learn fast. And I adapted that for my students and for my own approach to martial arts—as you win or you learn, and both are good. I have a whole bookshelf with three shelves of it full of medals.

Alan: That's amazing.

Sarah: I don't know how many other losses I have besides that, but I'm an over 100-time medalist and I can't tell you how most of those gold medal matches went. But the matches that I have no medal for or some of those bronze medals, I'm even more proud of because I know how hard I worked to get there or the very valuable lessons that I learned from those losses. Because when you're under stress, your brain learns that lesson better than if you're not under stress. And so your learning curve is accelerated when the pedal's to the metal, or when there's that actual pressure, or the audience—whether that's a perceived audience or one filling the Silver Spurs Arena down in Kissimmee—the fact that there are other people around you counting on you or other people around you watching helps you to learn faster.

Alan: Yeah, yeah. Now I love that. I love that, you know, through your training in both the professional world with this Scrum thing and, you know, the idea that, you know, it's okay to fail and that is where the learning comes from, right? I mean, and that's really the same in sport. Like, you know, you're learning those same things because there's only one person who's going to win that gold medal at the end of the day, right? But every time you lose, hopefully you're getting something out of that that you can then apply.

Sarah: But real winning is skill acquisition. Like, how many business owners have you heard—like, "Oh, I started a business and then it failed, and then I started another business and then it failed, and then I started my third business, and with what I learned from those first two, I took off." Like, and everything went really, really well because I learned from those mistakes. And I think that failure is necessary to progress and the real winning in all of this is that skill acquisition.

Which is part of why I like the franchise model, is because I get to learn from those failures and ideally not have to go through multiple business failures myself, but instead to be like, "Here's what happened, here's what happened. Don't do that. Do this instead." Like, "Here's the water you need to carry and the wood you need to chop. Don't waste your time with that other stuff."

Alan: Exactly. Right, right, exactly. You know, what you said about people failing at business first before finding the one that succeeds—it's like the beauty about the franchise system is that the people who have started the franchise system have probably already failed at other businesses and they're the ones who get to fail from, you know, the big failures and then learn and have this business that is then succeeding. And so you get to take advantage of their previous failures in order to start your own business. So hopefully your failures as a business owner in franchising are hopefully much smaller level micro failures and you're able to adjust versus the big failures where you have to start back over.

Sarah: Yeah, that's the idea, right? Yeah. Start back over. Yeah. Like I didn't have to come up with a coating. I didn't have to create, you know, 100 that didn't work. You know, I got to just benefit from an already working product, for example.

Alan: Yeah, that's really cool. I love it. I love it. Well, what market are you in, Sarah, and how can listeners contact you if they need their cabinets painted?

Sarah: Yeah, I'm in the Durham, North Carolina market. We service most of the Triangle as there is not a separate franchise in Raleigh. So if you're within about an hour of Durham, then we would be happy to help you. If listeners are looking to get connected with us, you can actually schedule a consultation for free with me at spraynet.com. Or you can just Google Spray-Net Durham and you can book directly through the website. You can also follow us on Instagram and see the cool social media stuff that I do on there. I'm always posting little reels and behind-the-curtain kind of ideas so you can see what it looks like to have the process done.

Alan: That's cool. That's cool. Well, congrats on all the amazing accomplishments you've had in both your sport in Sambo, as well as in business and turning things around, being able to grow the business from where it was at before. And I'm sure you're going to continue growing it over time. So yeah, congratulations for being a franchise champion and thank you for joining us there.

Sarah: Thank you, Alan. Thank you very much.