From Franchisee to Franchisor: Building Multiple Million-Dollar Brands | Barry Falcon

The following is a transcript from Episode 2 of The Franchise Champion Show, where host Alan Regala interviews Barry Falcon, a franchise industry veteran with over 30 years of experience. Barry shares his incredible journey from franchisee to franchisor, including his role as President of ShelfGenie, building and selling multiple franchise businesses, and his latest ventures at age 73. Listen to the full episode on your favorite podcast platform. 

Alan Regala: Welcome to the Franchise Champion Show. I'm your host, Alan Regala, CEO and founder of Athlete to Owner Franchise Coaching. I was a D1 athlete and use the principles of high performance training to build and sell a multimillion dollar franchise business. Now I want to help others do the same. So let's go.

All right. Well, I am super excited to have my very first guest on this show, which is the Franchise Champion Show. And this guest, Barry Falcon, I know is a good friend and mentor of mine. I knew him from back in the day when I first started with ShelfGenie - he was the president, and he has a great amount of experience from being a franchisee to being a franchisor and then helping other people franchise businesses as well. So thank you so much for joining us, Barry.

Barry Falcon: Yeah, happy to be here and look forward to chatting with you.

Alan: All right, I'm actually super excited. Yeah, it's good. I'm excited as well. And I love helping people and sharing the story. Awesome. Yeah, there's actually so much I don't know about your background, so I'm really interested in exploring that. I'd love to start off with just asking you about your background pre-franchising and then how you got into franchising.

Barry: Okay, sure. So a quick thumbnail is I grew up in New York City, right in the heart of the city. Went to high school and college there and went to Los Angeles on a vacation and never went home. And so I said, well, why would I live in New York in freezing weather when I could live at the beach in Santa Monica?

So I ended up staying in Los Angeles. I got married in Los Angeles in 1974. So that's like before you were born. So I loved Los Angeles, and I started working for a company as a young guy. I was with that company for a long time, and they asked me to move to Atlanta.

So I moved to Atlanta in 1985. And I worked with this company for 21 years in manufacturing. And then they sold the company and did a reorganization. So I took my severance package. And then I started doing entrepreneurial things right around 1992, '93.

So I did consulting and I had a couple of things. And then I learned about franchising. So my daughter was a competitive tennis player. She started playing at the ripe old age of six years old. And I played tennis regularly. I was a solid USTA 4.0 or 4.5 player.

But Stephanie loved it and she had natural ability. So I ended up buying a franchise. And that's how I got into franchising. I ended up buying a franchise called Velocity Sports Performance because I figured, okay, Stephanie could train there, right? And she's young.

So she played high school tennis, went undefeated for four years, got a tennis scholarship to UNC Wilmington, had a great freshman year, broke the school record with wins. And so she trained at Velocity Sports Performance. And I grew that business for a while. And then I said, boy, I want to do something else. I like growing and selling. So I sold that business and moved on to my next venture.

Alan: All right, so before we get on to the next venture, tell me a little bit - why franchising, first of all? Why not start an independent business?

Barry: Yeah, so I mean, franchising is really just a distribution model. And franchising just helps you market things and it's really just a channel. And so people buy a franchise because they want a proven business model. They don't want to be in business by themselves and they want to get support and help.

And so when I looked at it, I said, okay, I could buy a business, but I have to then make all the mistakes that other people already made. So I studied franchising and said, okay, this is great. I'm going to pay an upfront fee to join the family, and then I'm going to pay an ongoing royalty for ongoing support, new product development, things like that.

So I looked at franchises and I love sports so I bought a sports franchise. But franchising is just a great distribution model. That's all it is. So it's really good for franchisees and it's really good for franchise owners.

Alan: Of course, yeah. So you got into this because of your daughter playing sports and playing tennis, which is great. And that helped her get into college. Absolutely. All right, so what happens next? You decided to sell.

Barry: Yeah. So I grew that business and I said okay, I don't want to be the franchisee anymore. I want to be the franchisor. And so I grew that business for three years and then sold it and said, okay, I'm off to my next adventure, right?

So I sold that business and I hooked up with a couple of guys and we said, okay, we're going to - I founded this company called ShelfGenie, and it manufactured pull out shelves for kitchens, baths and pantries. And believe me, you never wake up on Monday morning saying, I want to be in the drawer business, right? You just don't. And so it's not glamorous, but it was a business.

And one of the guys had a factory, small little mom and pop thing in Richmond, Virginia. And so we ended up buying that. Changed the name from Shelf Conversions to ShelfGenie. And we said, we'll franchise it. So I had three years of franchise experience, and I was already studying to be a certified franchise executive.

And so I learned a lot about franchising and did a lot of due diligence. So we bought this company and we turned it into a franchise. And so that was right around the recession in 2008. And we bought this company in 2007. We launched it in 2008. And someone said there was a recession and we never saw it because our business was a home based business.

And so it was a hundred thousand or less to get in. And we sold a lot of franchises the first couple of years, and we grew very quickly. And so we outgrew the factory and we built another factory in Richmond, Virginia, and we moved the company from Richmond to Atlanta. And then we built a call center.

So all with the mode of let's get franchisees, let's help them make money. Franchising is all about franchisees. It's not about franchisors. It's all about franchisees. It's getting them up, opened and profitable and then guiding them, mentoring them, coaching them, sharing best practices with the entire system through quarterly meetings, annual conferences. And that's what makes franchising so great.

Alan: Yeah. So you going from being a franchisee to a franchisor, cannot be easy. I mean, that's a huge step in a different direction and a whole lot of different responsibilities. You know, what was that like? What were some of the challenges that you faced?

Barry: Well, you know, being a franchisee, you're counting on the parent company to kind of help you and guide you and mentor you. And sometimes those relationships are not very good. And you got to follow the guidelines and do the best practices.

And so being a franchisor while you have a great idea and a good system, you have to navigate the franchisees' requests. Because a lot of franchisees are very entrepreneurial and they want to change the system. And suggestions are great, but they want to change the system. But your goal as a franchisor - your main objective is get the franchisee up, running and profitable.

And my personal belief is you have to have a corporate location. So you're doing it the same way as you're doing. You can't say do as I say, not as I do. I'm a big believer that franchisors always have to have a minimum of one corporate location or more, but they have to live the same life as a franchisee.

So we always made sure we had corporate locations because when franchisees said, my lead costs are high or my close rates are low - okay, well, what are you doing differently than we're doing? Right? And in some cases, we mentored the franchisee. In other cases, the franchisee is teaching us best practices because they're learning things. And they came up with a new great idea that helps lead costs, helps close rates on the in-home sales.

So you have to listen. As a franchisor you have to take steps to benefit the entire family. While you like certain franchisees better than others, you have to treat everybody equally, right? You just have to treat everybody equally that's all there is to it.

And so you have to share everything and the franchisee is your customer, but he's also your partner. And they have to succeed. And that's how the business grows. So being a franchisor is not so easy. You have to mitigate the franchisees' requests and come up with new ideas as well.

Alan: So tell me a little bit about how that works. When someone is buying a franchise, they're buying this proven business model, and they're there to execute and get support from you as a franchisor. And you mentioned incorporating feedback from the franchisee. So how do you balance having people follow your proven systems, the systems that are in place that you've created, but at the same time, being open to receiving feedback on how to change the system, potentially for the benefit of everybody?

Barry: Yeah, you want to help the family. So our strategy has always been, get feedback. And if you need to try it, to prove it out before you put it system wide. Try it at the home office locations. Right. Try it at the corporation's home stores. Let the franchisee come up with the idea because he's going to test it maybe in his market, but do all the R&D on the franchisor's dime.

So whether it succeeds, great. If it doesn't succeed, okay. Let the franchisor roll it out first. So and then do some test markets. So do that at a couple of corporate locations, do it at a handful of franchisees' locations. Don't go from 0 to 100 and roll it out system wide when you haven't tested it in different geographic regions - there's different things. Buying patterns are different. Socioeconomic things are different.

So take small steps. Listen to the franchisee. And if you've tried it already, explain to them that you tried this. And here were the issues, right? Don't just shut them off because you don't want to get them where they stop giving ideas, right? So keep it flowing.

I always say you have one mouth and two ears. So listen more than you talk and have those relationships. And then as you grow, set up a franchise advisory council and have those people at the table and be transparent with the business, right. What's going on, what's working, what's not working, have that advisory council really be active in the strategy and the growth of the franchise.

Alan: Yeah, that makes a lot of sense and I can really appreciate having the corporately owned locations in addition to the franchise owned locations for exactly what you said. Being able to test new things out, being able to do what you are telling everyone else to do and prove that this works, actually. And yeah, anything that's new, it's just so nice to be able to have those markets to be able to try things and experiment to improve.

Barry: Yeah. It's - and so the toughest thing is and I was the president of another company called Concrete Craft and they did products as well and services. And so the biggest thing when you're in the product business is passing along a price increase to your franchisees.

And so they need to understand that costs go up, whether it's labor, whether it's material. And then you have to explain to those people, okay, things are going up. So how do we increase our margins or maintain our margins even though there's going to be a price increase? Okay. So what's the price elasticity.

So let's try it at the corporate locations first. We have a price increase at the corporate locations just like the franchisees. So let's try it see what happens. Does it change close rate. Does it change average order. At certain points, certain times the price just is going to go up. And it's not like gasoline where you change every day when you have a raw material price increase.

That then goes along to the franchisee, it goes along to the customer. And how does that affect the franchisees' business. So that's one of the biggest challenges that we had. And so we had to kind of bring the franchisees to understand, hey, we have one key component. And if the price goes up, the cost goes up for everybody.

So very important to have the franchisee understand, and how we overcame some of that was we instituted a volume rebate program. So the high volume franchisees were able to get rebates on a quarterly basis based on their volume. So in most cases in most industries, volume generates a lower cost.

So we basically didn't want to penalize high volume franchisees. Instead we wanted to incentivize them. So we gave them rebates. And so that offset some of the costs that were increasing. So by getting a quarterly rebate, they ended up saving money and really increased their margins. But that took a little while to implement.

And the other interesting concept that we had was we had franchisees all over the United States. And so the guy close to the factory had zero freight. So he would come pick it up. And the guy in Seattle was paying a lot of freight because it's coming from Alabama. Right? So was that fair? And so we didn't think it was fair. And it took a long time to kind of figure this out and get franchisees' input.

We did a financial model and study. And basically we built the freight into the product. So everybody paid the same amount. And so now it's fair to the system. So the franchisee in Georgia doesn't get a special deal. And all the franchisees on the West Coast don't pay more for the product. So we just leveled it and we took that excuse out of everybody's hands and said, okay, everybody pays the same price for the product, the freight's now built in.

We win some from the franchisor, we lose some. But overall it evens out and the franchisees are happy. So that's a big thing.

Alan: I certainly appreciate that. Being in Seattle, having product shipped all the way across the country, that made a lot of sense. And I always felt like the franchisor - the folks in the Home Office, including you - were always trying to do the right thing for the franchisees, and that's one of the reasons why I chose ShelfGenie over some of the other concepts that I was looking at when I was at that early stage. Making sure I felt comfortable with the franchisor, the people behind the scenes, I felt the trust that was there.

Going back to the price increases - so one thing I could see, every franchise is different, obviously, and how the franchisor makes money, like with royalties and in the cases of ShelfGenie and Concrete Craft if you guys had product sales to the franchisees - how do you balance trying to do what's right for the franchisees and making sure they're profitable, but obviously as a franchisor, you're trying to make money as well and you want everybody to be successful. How do you come to what can be seen as fair as far as the pricing goes?

Barry: Yeah, pricing is always a sensitive subject and it doesn't matter whether you're getting food produced from a food distributor or you're getting wooden drawers from our factory. And so it needs to be fair. But understand that the market will only bear a certain amount of cost at retail, right?

Customers will only pay a certain amount. And so whatever the price is, the franchisee has to make enough margin so they can pay for their advertising, make a good return on their investment, pay their staff, their installers and designers, and continue to advertise, because if they don't advertise, they're not going to get the lead generation they need in their home.

So it's really a balancing thing. And you got to balance it. And so when we look at the franchisees' P&L, we need to understand that the cost of goods sold has to be at a certain level, because then you have royalties and you have marketing fees. And you have designers and installers and insurance and internet and with all that said and done, the franchisee still needs to make money and they have to be successful. If not, the whole system is going to cave.

So while you have a price increase and then you pass it along at the retail level, it has to be doable, right? The consumer will only pay a certain amount of money, and then they'll stop buying. So we need to be competitive in the marketplace. We need to find other sources of material. But the franchisor must look at franchisees' P&Ls. They have to go really scrub through that, with the franchisee taking out all the vacations and personal stuff that they might want to put in the business.

But the business has to be profitable, and it's the franchisor's responsibility in any business to make sure the franchisees are making money.

Alan: Yeah. I mean, that is huge. To know that a franchisor will have that kind of mindset that they're really looking after the franchisees is so important. So, you spent quite a number of years as president of ShelfGenie. And eventually, things grew and roles changed and eventually the business was sold to Neighborly. Right. And for those that don't know who that is, maybe you could explain a little bit about how that process worked. And who they are.

Barry: Yeah. So when we started, this ShelfGenie journey was always a plan to grow and exit, right. And so we kind of kept things organized. And that was the plan. I left the day to day operation after 5 or 6 years, and I went to be the CEO of another company called Concrete Craft. And one of our franchisees at ShelfGenie, Andy Pittman in Raleigh, became the CEO of the company. So I was the chairman. And Andy reported to me, and so I went to build another company called Concrete Craft, and I built that for three years and then sold it to a private equity company called Home Franchise Concepts.

And then I was doing franchise consulting. And then, sorry, just to back up here. I built Concrete Craft up to about 35 locations and then it was time to exit. I was not the founder, I was the CEO, and I was brought in as a partner to help grow it and then exit.

And so we put that together. And so I got my first experience with selling a franchisor and sold that to Home Franchise Concepts in December 2014. And so I transitioned out. After 90 days, the two founders stayed on. I negotiated a five year employment agreement for them, and they stayed on for ten years or more before ultimately, they left.

Alan: And so tell me a little bit more with that one. Of course, people hear about private equity and companies being sold to private equity and sometimes good things, sometimes bad things. With Concrete Craft, can you tell me a little bit more about your role - was that the intent from the beginning when you kind of came on board?

Barry: Yeah, it was the intent from the beginning. And I knew the industry, I knew most of the home service franchise companies. It was a little too small for Neighborly at that time. And so we looked around and through a network of friends, they said, hey, Home Franchise Concepts was the franchisor of Budget Blinds at that time. And that was - they had that and one other company called Tailored Living.

And so I just approached them and said, hey, we got a business here in Atlanta and we're doing this kind of revenue, and this is what we'd like to sell it for. So it wasn't a big transaction, but this was an easy one because I went right to the source. They were looking to buy a company and kind of expand their franchise portfolio.

And this was a relatively inexpensive acquisition for them. So hired an attorney, did the due diligence. And then we closed that deal. So we closed it. I transitioned out after 30 or 60 days. John and Dan stayed on board. And so after that then we started to plan the ShelfGenie exit.

And so ShelfGenie, we sold it in the pandemic. September 30th, 2020, right in the middle of the pandemic. But the process was I hired an investment banker called Boxwood Associates. They're really good, and they know the middle market. We had to get our act together internally, which helped. We had too many companies.

We had a call center company. We had a manufacturing company. We had six corporate locations. Each one was a separate company. And we had to do - it was very convoluted. And so we kind of cleaned all that up. It took us nine months or a year to kind of get all the legal stuff cleaned up. And so we hired Boxwood and they went out to auction.

They built the pitch deck and they went out and they went to all the platform companies that you could think of - Authority Brands, Neighborly, Home Franchise Concepts and all the platform companies. And a platform company is somebody that has many companies under one umbrella.

So we went through the process of letters of intent and airport meetings because we didn't tell the staff - we just met the potential buyers at the airport, myself, the CEO, and the controller were the only people that knew, because we needed to be able to give financials.

And why do we do it like that? Because we don't need the rumor mill going and everything happening. And so in my experience when a private equity company buys a company, they're going to buy it for some multiple of earnings. And so in most cases after they buy it they're going to begin to infuse capital, infuse technology, infuse marketing activities because they need to get a return on their investment. They're not buying it just to buy it - they want to buy it, grow it and flip it.

So when we did our marketing and got it down to two potential buyers, all giving us offers, Neighborly came up with an all cash offer. So no earnout. No "you have to reinvest in all this stuff." So it was clean, very, very clean. So I had a board meeting and we all said, let's do it.

So we accepted Neighborly's offer, closed I think in 30 or 45 days. They did their due diligence. We had quality of earnings. Boxwood handled all the negotiation, and one day on September 30th at 12:00, we had our closing call.

And Neighborly was now the proud owner of ShelfGenie. My transition period at that time was probably 6 or 7 minutes. Andy was the CEO. The wire transfer hit the bank account. I popped the bottle of champagne and we said, thank you very much. It's been a good run.

Alan: Yeah, that's amazing. I hadn't actually heard any of this before. So this is really very interesting for me to hear. And from a franchisee's perspective - this podcast is all about helping people, especially those that are looking to potentially buy a franchise. And with something like this, a bunch of questions come to mind, like what kind of impact does this have on the franchisees? What is life look like after being gobbled up by a large company? And can you tell us a little bit more about just Neighborly itself?

Barry: Yeah. So Neighborly is owned by KKR. They're a very large private equity. But Neighborly platform has 33 or 35 home service brands. They're the largest platform company in the world. Billions of dollars in revenue. And they were based in Waco, Texas. And I think they have an office in Dallas now as well as Waco, but a very large company.

So a company buying another franchisor - what that brings to the table is purchasing power. When they're doing printed matter instead of doing a million impressions, they're doing 10 million impressions. So they get costs down. And so they infuse capital and technology and things like that.

So I think it's been good for the franchisees after the transition. Neighborly paid a lot of money for ShelfGenie. And so they need to recoup that investment. So it's five years now. They bought it in 2020. And now it's 2025. So I'm coming up on the five year anniversary. They're still growing I think they're over 200 locations now. And the business is still going and the franchisees are healthy. And the franchisees like yourself sold. And it's always good when a franchisee sells - it's healthy for the system for that to happen.

So yeah, being owned by the private equity company while people say, well, they're just all about the numbers, they don't care about the people, they do care about the people. They don't want to run the business day to day. They have a management team in place, and they want to grow the business with a potential exit again for themselves.

So they just infuse technology, buying power, processes and they usually help small emerging brands. And so ShelfGenie was maybe not so emerging with well over 100 locations at that time. But they helped them by infusing marketing dollars. How do we get more franchisees?

So my experience with private equity companies is, it's always good for the franchisee. I've never seen it bad for the franchisee because the private equity company wants to get a return on investment. So they want it to grow and they want it to grow quickly.

Alan: Yeah. You know, from my standpoint, never having experience with being purchased by private equity, it was a blessing for us. The amount of money that was injected into ShelfGenie for buying a new factory, for example, really helped us out. For the most part for me, not a lot changed. For me as a franchisee, I think it took some amount of time to transition systems and things over to Neighborly's systems. And it kind of seems like it's still happening actually to this day. But there were a lot of advantages and having that purchasing power like you mentioned, getting rebates on things.

Getting that new factory cut the lead time down substantially I believe for franchisees. So that helps with cash flow. And instead of 6 or 8 weeks and 12 weeks during the busy time, getting that lead time down to under four weeks is a huge win for the franchisees.

Barry: Yeah, that was the biggest win for us for sure - the new factory helped a ton. And I mean I think the culture has to work. I've heard from other folks about private equity buying and then just kind of building things up and then trying to flip it and sell it, which can be a good thing. Like in this situation, I think it felt like a good thing. And it still seems like a good thing with KKR and Neighborly. They've done a really great job.

I think in other instances for the franchisees potentially, if it's not the right kind of company, or maybe they don't have the same values, the culture has to work. I've heard horror stories about this where maybe if they're all about the dollars, maybe they completely change the culture and things drastically change for the worse.

And so I think it's great when someone like a Neighborly and KKR come in and the values match and want to do what's still what's right for the franchisee, because that's how they're going to grow, is making those franchisees profitable.

And with any acquisition, one of the toughest things is they move the corporate office. So here was an Atlanta based company. And so they made some people some offers to move to Dallas and other people they did. But over time they basically moved the office to Dallas.

And so that was just part of the consolidation of being smart from a business standpoint. And so not having duplication of labor. So that's a tough thing when franchisees know all the people in the Home Office and then now that's going to change and change is tough. But hopefully the change is good. And there's going to be change when a company makes an acquisition.

Some change, not drastic. And hopefully it's all good. If you're not changing you're not growing. And so at some point, you move the office to another city and it happens. And Concrete Craft, the office was in Georgia and then it went to Orange County, California. And so now it's in Dallas also. They have a training center in Dallas.

So things change. And with home offices, it doesn't affect the franchisee unless he's coming for a meeting or something. It's all about, how do I keep my margins, grow my business and build my business so one day that I might want to sell it.

Alan: Okay, so post ShelfGenie sale, you started helping other companies grow and become franchises. Is that correct?

Barry: Yeah. Correct. So after I sold Concrete Craft, which was in 2014, I went to work for a company called iFranchise Group. They're a franchise consulting company, probably the largest company in the world for franchise consulting.

And I hired iFranchise Group to help me launch ShelfGenie. So they did operations manual, strategic planning, website, marketing plans. So they were a strategic alliance for us when we were building out our franchise and then getting the legal documents done. So I was really good friends with the two owners, Mark Siebert and Dave Hood.

And so when I sold Concrete Craft and I was the chairman of ShelfGenie, they asked me what I was going to do next, and I said, I don't know, I'm going to go get another franchise company, grow it and sell it. And they said, why don't you come work for us? So I did that in 2014. I've been there ever since.

And so my role there is talking to companies that have at least one or more locations and they want to franchise. So I go through the entire franchise process. We do webinars and then see if they're a good candidate to franchise their business. So in the last 11 years, I've helped a lot of companies, successful companies franchise their business and grow, and a couple of them have exited already.

But I still work with iFranchise Group. And then as I got older, I said, I'm going to grow another franchise business. So me and a couple of guys just started another new venture.

Alan: Oh man, you just keep going. You just can't sit still. You just got to keep building.

Barry: Well, you know, I'm not ready to retire. And so because it's fun, you know, what are you going to do all day? And so I like the mental stimulation. Franchising has been very good to me and very good to my family. And so I love franchising and that distribution model works. And so I spent time with the kids, I played pickleball, I played padel, I still want the social interaction. I want to build another business and mentor people along the way.

So I just launched another franchise. I just started another franchise based in Tempe, Arizona called Conquer Padel. And padel is a racket sport like squash. You play in a glass enclosure with a net, a tennis ball and a paddle. It's the fastest growing sport in the world currently - born in Mexico. Pickleball is the fastest growing sport in the United States.

But I saw the growth of pickleball. And I see the growth of padel. So I partnered with a couple of guys that know padel and one pickleball player, and we franchised our business.

And so we just launched the franchise recently. We have our first corporate location will be opened in Tempe, Arizona in 60 days or less. It's currently being built out. We have franchise prospects in the pipeline right now. We're very excited about it. We'll have five courts in a 22,000 square foot, totally air conditioned, state of the art building, and we're going to open up six more corporate locations.

We're raising $15 million in a corporate fund to open up in Atlanta, in Salt Lake City, in Denver, San Jose. So I told my partners, I said, I'm 73 years old, I want out by the time I'm 80. So let's run and let's have fun and then let's look to exit in seven years.

Alan: That's incredible. That's the plan right now. So that's keeping me pretty busy. So our grand opening will be in July and we'll have a lot of fun doing it. So I'm also learning how to play, which is a fun racket sport. And I would tell anybody if they've never seen it before, go to YouTube and look up padel.

In some countries it's called padel. In other countries it's called paddle. It grew up in Mexico. It's very big in Europe, South America, and it's coming to the US. We are the first franchised padel company in the country. So we're going to grow. And we plan to have 50 franchisees in our first 12 months.

Barry: Yeah. Padel is pretty amazing. So I've never played padel, I'm obviously a tennis player and love racket sports. Seen lots of pickleball, I've played some pickleball. But padel is one of those things that I've only seen in videos like YouTube videos like you mentioned. And I highly recommend anyone go look that up.

And it is crazy. The kinds of points that you can have very creative and just going outside of the court and playing out there and come back in. So it's all doubles usually and it's on astroturf with a deflated tennis ball. And so for old guys like me, it's very easy, forgiving on your knees versus playing on hard courts.

So it is fun. It's easy to learn. Kids love it. They're out there hitting the ball around, learning the rules. There's a lot of strategy. So the standard line in the industry is pickleball is checkers but padel is chess. So a little more strategy of lobs and drop shots and slicing off the glass walls.

And it's an up and coming booming sport. So we're active with the schools in the neighborhood right now and setting up leagues and drills. And it's just fun. And so, it's fun being a pioneer of somebody that's first. And so we're - as I said, we'll have some competitors. I'm sure there are padel clubs out there, but no franchises. We're the first one.

Alan: So the first couple businesses you franchised - ShelfGenie, Concrete Craft - I mean these are home improvement businesses. I'm assuming Concrete Craft was maybe similar as far as being relatively low cost to get into. Maybe home based and we talk about maybe it's $100 to $200,000 investment.

And now you've got the opposite end of the spectrum here, assuming that is for sure. It's like maybe a million, multimillion dollar?

Barry: That's right. Yeah. It's great. You hit it. And so it's 1 million to 2 million, at least 2.5 million. And so what are the big costs? When you're looking at a building from 20 to 40,000 square feet, one is rent's going to be expensive.

So you've got to have the right real estate - real estate is important. So rent is important. Ceiling height is important. And where the columns are in the building are important. So we have a software program that we can kind of see how many courts we can fit in the building and where the poles are, where the columns. We need at least a 22 foot clear ceiling.

But our first location, a little over $1 million to build. And so the big costs are HVAC. So air conditioning, heating - big cost. If the building has it, that's a huge upside. The first building we're in right now in Tempe, Arizona was a mattress warehouse, air conditioning all in there. Pretty good high ceilings. All we had to do is - I mean, we have to rip out the restrooms and make locker rooms.

We'll serve grab and go food. So we have a little kitchen area and a bar type thing. And so a reception area and the ceiling height was there. So it's going to range from 1 million to 2.5 million depending on the building, what's there and what you have to put in. But a lot of landlords now, they see the growth of this sport and they've given some good tenant improvement allowances as well.

But then you'll have members who will pay a monthly fee and then they'll pay some court time. But yes, at the opposite end of the spectrum, from 100,000 all in to this is 1 million to 2.5 million all in.

Alan: Okay. So with this type of investment, obviously very different, you're probably going to have very different types of buyers. Tell me, from someone who is looking at potentially buying a franchise and getting into this space, what would be the kind of characteristics, like ideal characteristics of someone who's looking to buy, start a padel franchise? Of course, they have to have the financial net worth to be able to afford it and or go get a loan.

Barry: But a lot of people will buy it that are high net worth individuals, multi-unit operators, and they're looking for the next big thing, right? So there's plenty of franchisees out there that own 10 or 20 Orange Theory Fitness. And they ran that bandwagon from the start, sold and exited. And so Anytime Fitness and things like that.

And so our target candidate is going to be a multi-unit operator, somebody that likes sports. They might have bought a trampoline park in the past. So there used to be big investment but a very good return. It's not going to be - or it could be an exec with a check. Somebody that just got downsized. They got a big severance package, but it would need to be an exec with a check, not a manager with a check because he couldn't afford the startup.

But there's a lot of - a restaurant costs a couple of million bucks to get in, and so does a trampoline park. So does a pickleball facility. And so there's a lot of big box stores that are franchises.

And so our target audience is somebody that loves sports and or they want to diversify their portfolio. So they might step into the club maybe once or twice. They might buy it as an investment, hire a general manager. And that general manager gets it open, runs it and might have equity.

So people that own a lot of other fitness concepts, they might just do it to diversify the portfolio and say, I want to get in on the new wave, just like they did on boutique fitness, so they can do a manager-the-manager model. Absolutely. I mean, there's people that own 50 yoga studios and they've never been in one. Right? So they're just a multi unit operator and they build their infrastructure.

So there's - I mean like Ninja Nation is a big box store, 10-15,000 square feet for ninja type training and stuff for kids and adults and birthday parties. And so the business model for Conquer is of course, memberships and people playing. But it's corporate events, it's team building, it's birthday parties, all of those activities and we'll be open six in the morning till ten at night.

So a lot of people will come before work and a lot of people will come after work. And during the day you'll have leagues and ladders and you'll have stay at home moms that want to get out and play, because the sport - there's a lot of women that play. So it's not male dominated by any means.

I mean, there's leagues all around the world, there's tournaments. And so we'll have all of those activities at our clubs.

Alan: Nice. So you mentioned pickleball as well as being the fastest growing sport in the US. And so you have ties into pickleball as well.

Barry: Yeah I live in Peachtree City, Georgia and my oldest son said, hey dad, they're building an old age home down here where I live. You got to come take a look at it. So that means active 55 and over. So I looked, and I bought it. My wife and I bought a house five years ago, and it's an active 55 and over community. And I played tennis and I played racquetball. And some guys I met said, hey, let's go play pickleball. We got courts. And I said, yeah, I've kind of vaguely heard of pickleball.

Well, I got out there and if you're a racket sports player, you pick up pickleball and you love it. So I played a couple days a week. Then I got, of course, obsessed, which my wife will tell you. And I got to play five, six days a week.

Then I'm playing tournaments, traveling all over the country. Then I said, okay, whatever. And so I was a pickleball fanatic. And so now I've backed off a little, but a couple of my friends said, hey, let's - it's hot in Atlanta, it's rainy, there's pollen. Let's build a pickleball facility. Of course. Sure. Because why not?

So we're building - I'm an investor in a pickleball facility called Let's Go Pickleball. And it's going to open in August and it's going to have 20 indoor pickleball courts and two padel courts. Besides today, padel is the fastest growing sport and I'm involved in padel. We got to have some padel courts here.

So with two padel courts and 20 pickleball courts, 63,000 square feet ready to open in August. And so I can play some pickleball, I can play some padel. And I just love my racket sports. And of course we'll have some ping pong tables there. We'll have ping pong tables at Conquer as well. So I'm a big racket sports guy.

So I play pickleball normally in the mornings. I play padel every other day or something. And I'm learning that game. I'm more of a pickleball guy than padel, because I'm a little older and you got to run a lot more in padel.

Alan: So you guys are creating a facility with the pickleball courts and then a couple padel courts. Is this going to be a franchise as well?

Barry: Absolutely. Of course it is. Without a doubt, our franchise documents are final. And we just hired our sales team. We're outsourcing the sales in both companies - Conquer Padel and Let's Go Pickleball.

So we've hired professional sales organizations to handle it because they're good. And I like to surround myself with the best people. So two different sales organizations, one for Let's Go Pickleball and one for Conquer Padel, both launching very soon. Websites are up and operational and want to give anybody a tour of any of the facilities if they're interested.

Alan, I'm sure you and I are going to play pickleball and padel the next time we see each other.

Alan: For sure. I would love to. So getting back to franchisees, you've got this wealth of experience in franchising and mostly being a franchisor, of course. What's the biggest mistake that you see franchisees make? I guess from two standpoints. One is when they're investigating franchises before they've actually purchased. And then the second is after they become a franchisee.

Barry: So I think one of the key things at the beginning is the franchisee needs to understand two things that are really important. One is what are the financial requirements.

So they got to make sure that they're not undercapitalized. So if you could afford a Chevy, don't go buy a Porsche because you're going to be drained, you're going to drain the cash. So make sure you understand the buildout costs, the one time getting started. And what's the operational cost. So you don't go broke in 90 days because you don't have enough operating capital.

The other thing is really understand your lifestyle of what kind of lifestyle you want. So do you want a business that's open 6 or 7 days a week? Do you want a business that's open from morning till night? Do you want a business that takes in a lot of cash and you're not there? So understand lifestyle.

And you could be trained because the people that bought a ShelfGenie or Concrete Craft, they might not have any experience in doing in-home sales or doing installations, but they become the business owner and they're out in the community. So understand what your role in this business that you're going to buy this franchise.

If you like sports, then look at sports franchises. And if you like kids, look at franchises with kids. If you know nothing about a restaurant, you might want to stay away from a restaurant. But what's your lifestyle?

And so when I bought Velocity Sports Performance as my first franchise, I was the franchisee. But I had a general manager. I didn't have to be there every single day to open and close. We didn't take cash. And this is back in 2003, 2004, 2005. We didn't take cash because I knew that cash makes honest people dishonest. So it was credit card, debit card, check. But no cash. Didn't want to do it, didn't want to deal with it.

And so I tell franchisees that are going to go look to buy - use a consultant like yourself. Let them do a personality profile, let them understand where your strengths and weaknesses are. But understand the market, understand what you're getting into.

So are you getting into - if you're an employee? This was very interesting. And I talked to one of our prospects at Discovery Day, and I said, if your sales person doesn't show up or calls in sick and you go on the sales call for them - absolutely. This person was also looking at a home health care business. I said, okay, if your nurse didn't show up, are you going to go bathe the old senior citizen guy like me?

And they said, hell no. I said, well then maybe this is not your business because you got to be able to fill in. And so if you're buying a business, understand that your manager, your key employee might be out sick. A death in the family, something happens. Can you fill in? If you can't, the business has to go on.

You can't just have one person and it stops. So understand when you're buying a business what your role is. Are you the opening person? Are you the closing person? Do you want to have to deal with phone calls six, seven days a week from morning till night? Is it a nighttime business? Is it like a bar and a restaurant together, it's nights and weekends. No breakfast, but nights and weekends.

So I think you should have a franchise coach talk to you and kind of really plan out the industry segments you want to be in and then understand how good is the franchisor. Do your validation calls to call current franchisees. Ask them three questions. Are you happy that you bought this business and would you buy it again if you had the opportunity? Question number one.

Question number two is the Home Office taking care of you? Are they responsive? Are they mentoring you or are they looking at new things? And item number three - are you making money.

The franchisor should make sure the franchisees - all those things happen simultaneously. But the new prospective franchisee needs to call and validate and answer those questions. And by law, the franchisor has to give them a list of all the franchisees.

So the franchisee has to do their homework and look at a couple of different brands that your coach is giving you. Look at them. When you buy a house, you buy a car, you look at a couple of different brands, see what the chemistry is between you and the franchisor, meet some other franchisees, see what the chemistry is, and then look at lifestyle.

It's very important. And look at the competitive landscape. Are you just another hamburger place? Another one when there's 50 of them out there, or do you like to be a mover and shaker and be a pioneer, an early adopter of a new brand? But that's really important.

Alan: Yeah. These are all great tips. And I definitely can relate. When I was searching for a franchise and I used the franchise coach who guided me through the process. And the validation part is so key. Being able to ask those questions and get honest feedback from owners who have really no incentive to lie to you or tell you anything that's different.

And I think, like what you said about meeting with the franchisor, looking at a couple different options, but talking to the people behind the scenes, the executives to really get a sense for who they are. And as I mentioned earlier, that is what swayed me from one brand after visiting one brand and being like, these aren't quite my people, it just doesn't feel quite right. And then meeting with you guys at ShelfGenie and it was like, oh yeah, okay, this is these are my people. And it really made the difference.

Barry: Well, you have to - I mean, if you're going to go look at a franchise brand, Google search the executives, find out what their background is and see if there's some bond there. When I'm talking to prospective clients, I'm always trying to find out - I always end any one of my discussions with what do you do for fun? Because I want to be able to relate to them, whether it's running a marathon or whether it's playing tennis or playing pickleball. I want to be able to build a bond of some sort.

And so find out what the franchisor - find out who the franchisor people are, go Google search and see what they do and what they're all about. Are they philanthropic or what are they involved in? And see if you could learn about the culture in advance.

Alan: Yeah, that's great. All right. Well, Barry, where can people learn more about these new brands of yours or connect with you?

Barry: Yeah, sure. So my easiest email to remember is Barry at BarryFalcon.com. So first name at first name last name. Conquer Padel Club and Let's Go Pickleball. You could search their websites and I can give you any information that you'd like to find out about. And so email address is again is Barry at BarryFalcon.com. You could learn all about me.

Alan: Awesome, I'll put that all in the show notes as well so people can find it. Congratulations on being a franchise champion Barry. And thanks so much for sharing these nuggets of wisdom to all our future franchise champions.

Barry: Oh any time. And I would tell folks, this is - you and I have a long relationship since 2010. And so 15 years. And that's what franchising is all about. Make friends, have relationships, help each other, mentor people, learn and keep those relationships going and keep them in your inner circle.

And it's been a pleasure getting to know you. And I wish you nothing but success. And I'm here to help you in any way I can.

Alan: Awesome. Thank you so much, Barry.

Barry: Okay, guys. Thanks. Take care. Have a great night.