How to Build a Scalable Franchise Business With Nick Friedman

Nick Friedman (00:00)
We were able to come in and professionally handle that. And then like you mentioned, we ultimately franchised the business to the point where we now have 200 independent franchise owners all around the country providing the service. ⁓ and I’m also very passionate about real estate. What’s funny is we’ve actually acquired and owner-occupied all of our offices ⁓ that we’ve ⁓ occupied for the business, both warehouse as well as office space and some single family homes along the way. And

And actually some of our franchise owners as well have gotten or have started in the real estate space and have added this as sort of an add on solution that they can ⁓ create from a cash flow operating business standpoint.

Dylan Silver (02:07)
Hey folks, welcome back to the show. Today we’re joined by Nick Friedman, a real estate entrepreneur and business owner with College H.U.N.K.S Hauling Junk with 200 franchise locations throughout the US, helping folks during a move with full service move services. Nick, thanks for joining us here today.

Nick Friedman (02:26)
Hey, thanks for having me on.

Dylan Silver (02:27)
Great to have ya. And I’d like to start off at the top when we talk about different ways to get started and then also build a business in real estate. Going back to the very beginning, what made you guys start a moving business?

Nick Friedman (02:42)
Yeah, so it started actually in college, hence the name. My buddy and I had been brought up to follow that more traditional career path, work hard in school, get good grades, get a job after college, and that, you know, just

The corporate world didn’t seem appealing to us. So it was actually summer before our senior year of college. my best friend from high school, his mom had a beat-up cargo van from her furniture store. She said, Hey, why don’t you guys you guys use the van? You can move people’s furniture, haul their junk away. And then she looked at us and said, You guys can be college hunks who haul junk. And we just kind of laughed about it at first. And then we were like, that’s kind of a catchy way to make the phone ring, not what people typically associate with movers or junk haulers. so we made that our name. Most college kids would quit that and go do something in the real world after they graduate. We decided after a very brief

In the corporate world, we were going to make it a year-round venture. So we started by actually clearing out people’s unwanted items, hauling away their junk to be properly recycled, donated, disposed of. We actually got a lot of work from real estate investors that were doing flips and foreclosures and things of that nature, where people left a bunch of stuff behind and it just needed to be hauled away. And then we eventually evolved into also doing moving services if people, both you know, homeowners and businesses were moving.

We were able to come in and professionally handle that. And then like you mentioned, we ultimately franchised the business to the point where we now have 200 independent franchise owners all around the country providing the service. ⁓ and I’m also very passionate about real estate. What’s funny is we’ve actually acquired and owner-occupied all of our offices ⁓ that we’ve ⁓ occupied for the business, both warehouse as well as office space and some single family homes along the way. And

And actually some of our franchise owners as well have gotten or have started in the real estate space and have added this as sort of an add on solution that they can ⁓ create from a cash flow operating business standpoint.

So really really good to be here. And it was I call it a twenty year overnight success, you know, humble beginnings of the beat up cargo van and you know, now two hundred franchises across the country. It’s it’s been quite a journey.

Dylan Silver (04:35)
These stories about folks who start businesses in college are some of the best stories, right? But we oftentimes, as you mentioned, see the success. We don’t see the journey along the way. Two hundred franchises. Was there a pivot point where you realized we’re gonna scale this thing to, you know, dozens and now two hundred plus franchises?

Nick Friedman (05:42)
Yeah, you know it’s funny, we got mentioned mentioned starting a business in college. We were there was a Newsweek article that was written once ⁓ several years ago and it was talking about guys who started businesses in college that had gone on to be successful. We were one of the ones that they mentioned, but they also mentioned Mark Zuckerberg from Facebook, Michael Dell from Dell Computers, Bill Gates from Microsoft. So there’s a few zeros missing from our balance sheet. I think we probably should have navigated towards the tech sector ⁓ if I’m

being honest in in in hindsight. But no, w in the early days we were doing all the work ourselves and we were just kind of figuring it out. We had to be very resourceful. We always had aspirations of being a national brand. We actually went out and we bought a one-800 number ⁓ and put it on the back of our truck to make ourselves look bigger, but it was still routed to our cell phone. And I always tell the story, people would call the 800 number to complain about driving sometimes. And I’d be in the driver’s seat answering that phone call saying, no, we’ll fire we’ll fire those guys when they get back to the office, you know, we’ll tell them to be safer on the road.

⁓ and actually one of our mentors recommended to us a book called The E-Myth Revisited. It was by a guy named Michael Gerber. And really the key takeaway in that book was ⁓ people don’t fail, systems fail. So if you’re going to create a scalable business, you have to start creating a scalable system for that business to grow. So when we read that book, it was like kind of the the next light bulb moment for us is hey, if we’re ever gonna have another truck, let alone another location or even be able to sell a franchise, we have to start documenting how we do stuff. And

you know, I guess, you know, good or bad or otherwise, there there weren’t resources like this type of podcast or even, you know, sh TV shows or or social media that that promoted entrepreneurship as much. And so we kind of just started creating manual checklists about how we drove the truck, greeted the customer, sold the job, estimated the appoint you know, the the the size of the load or how long it was going to take us to do the work. And that was really, I think, the foundational pivot point to say, hey,

We want to be a scaled business and you know, whether it takes five years or fifteen or in our case twenty, to to get to where we we finally have gotten, ⁓ we’re going to just diligently keep executing and and slowly chip away and see that momentum ⁓ take flight and and that’s ultimately what happened.

Dylan Silver (07:45)
If we go back to the beginning here, what what college was this? That that you started the business?

Nick Friedman (07:49)
Yes.

So we started up in Washington, DC, where we grew up. And we’d gone to high school there. And then my business partner went to University of Miami in Florida. I went to a school way out in California called Pomona College, just east of LA. But we would reunite during the summer vacations back home in DC. So it was sort of the summer vacation activity. Then we both went back to college for our senior year. After we both graduated, we moved back to DC. Like I said, kind of a a little brief stint in the corporate world before we decided we were gonna make the business a year-round venture.

Dylan Silver (08:18)
So there’s so much ⁓ momentum, you know, built around people moving, right? And when we talk about it’s not just one thing. It could be military, it could be moving for school, like you mentioned, you and your buddy would would reconnect during the summers, but it often seems like this is such a chaotic process. Were you realizing this as you were scaling the business that there’s there seems to be so much chaos here? We could provide so many solutions to folks.

Nick Friedman (08:44)
Yeah. So it it kind of happened over time where I realized and actually saw a statistic finally that it kind of brought it all home that moving is number three next to death and divorce as the most stressful time in somebody’s life. And usually if there’s a life event such as a death or divorce, there’s also a move on top of it to compound the stress. And then we also, on the flip side, on the junk removal side, we s we we learned ⁓ through

you know, shows like tidying up that the clutter and stress, clutter and junk are shown to create stress and anxiety when it piles up in people’s living spaces. And so, you know, we have the opportunity not only to remove the stress of transition of somebody moving or downsizing or moving across town, across town country, but also when we remove junk from people’s garages or basements or attics, it it helps sort of clear the the the physical clutter that then clears away the mental clutter that they might be dealing with as well. And so

yes, that you know, obviously when we first started, we knew we had a catchy name, College H.U.N.K.S Hauling Junk. We had bright orange and green colors. We wanted our trucks to stand out. But we realized very quickly, as you said, that we had to be very intentional about our training of our frontline employees and the service experience that we were going to deliver. ⁓ because now as a national brand, we actually have a national accounts program where we do, you know, hallways and moving services. You mentioned military, we’re doing long distance military moves as well.

And so there’s you can’t do that if you’re just sort of like winging it. You have to be very intentional about the service experience. And when it comes to residential, if you think about somebody’s home, it’s the most sanctu, you know, the most ⁓ just sacred place, right? It’s it’s it’s their sacred living space. And they’re letting a complete stranger or strangers come in there to handle their belongings to pack them up and load them up and transport them and unload them. And so the the stakes are high. It’s it’s certainly not easy. We we aspire to be

the the most buttoned up and professional and sometimes some jobs go sideways and we have to, you know, pick up the pieces, both ph physically and you know, service wise in in those cases. But ⁓ but yeah, that’s that’s the intention is to really separate ourselves by by leaning on our technology and now our systems as well.

Dylan Silver (11:20)
There is so much that goes into a move. And ⁓ as ⁓ a realtor myself in in ⁓ the greater Austin Metro in Texas, one of the things that I see all of the time is people

May start to think about the move, they maybe have a move date set, they then change the move date, they think they’re gonna go somewhere, they’re not sure. There’s so much that goes into it that some of the most important logistical components get left till the very last minute. I’m sure you see a lot of that. How do you handle that client conversation and how is your team handled to to to on a franchise level handle those client ⁓ conversations as a consultants, if you will, right? Right.

Nick Friedman (12:00)
Yeah. So look, we we we actually train our team that every move has a story. Every, you know, move has an emotional story attached to it. It’s not just somebody’s stuff that we’re moving or hauling, it’s somebody’s life, and there’s likely something going on behind the scenes that we don’t even know about. so we have to be prepared for that and and mentally empathetic for though and compassionate for those situations. You’re absolutely right. I mean, one of the things we try to coach our clients on is to be what we call move ready.

on the day that we show up with the truck ready to do the work. And move ready typically means the items are boxed, the drawers and cabinets are empty, and our guys are there to wrap, you know, the furniture and and load the truck and transport. ⁓ but if that wasn’t communicated or maybe it wasn’t received or the client just left things to the last minute, then we have some you know catching up to do on the packing and and and you know loading and wrapping of those boxes, which can you know really extend

The length of the j the job and unfortunately the cost of it as well. we are leaning heavily into AI developments to try to streamline some of those what-if scenarios so that you know the handoff goes from the website when somebody might make a lead inquiry to our call center to actually booking it on the calendar to actually when the guys show up to do the work. There’s a lot, as you said, that can change and and can get lost in translation going from each of those steps.

So if we can have an AI overlay, which is what we’re working on, to really document all the conversations that have been had, make recommendations and also call out where the move could go sideways if it’s not, you know, properly prepared for. Maybe there was an extra piece of equipment needed for disassembling a bed. And if the guys didn’t read that note and they showed up without it, you know, now the move’s already starting off on the wrong foot. So there’s a lot that can go into it. But now with AI, we we’re not there yet, but we’re really mapping out.

How can we take the value chain from lead to conversion to execution and follow up to make ultimately the the experience for the person moving more frictionless ⁓ than it than it has to be or already is?

Dylan Silver (13:58)
Junk removal services, pivoting there, right? There’s a lot of folks who need to do this not just because they’re moving, but sometimes they buy a property and a lot of the distress is, hey, this property was a hoarder home and you know, so many other things. How often do you see those types of situations?

Nick Friedman (14:14)
We we’ve seen everything from, you know, just the expensive piece of furniture that the person bought didn’t like and just wanted to pay to get rid of. And we’re like, You sure you want to get rid of this? to as you described, the the hoarder situation ⁓ where somebody hasn’t, you know, thrown anything out in 10, 20 years and we’ve got to our h hunks have to put on hazmat suits to even enter the the premises, ⁓ or to like an investor property where maybe they’re buying it kind of sight unseen. They don’t know what’s inside and

You know, they get in there and it’s it’s it’s kind of messy and ⁓ you know, they need the stuff out of there so they can begin the rehab. So it’s it’s a wide swath of stuff that that our junk removal crews have have seen and covered, whether disassembling a you know a swing set or you know, taking a fridge out of a basement or just clearing out a crawl space. We’re kind of prepared for all of it. We also know that we when we go into it, we don’t always know what it is that we’re getting into. And so that’s I think that’s part of the job there as well. the idea I think we’re

Where we come in is we’re more of a full service option. So a lot of folks, right, will rent a dumpster and then they got to find somebody separately to load, you know, said dumpster, but the dumpster is sitting there for a couple of days and you got to coordinate the pickup. We actually have dumped trucks. So we show up with typically a two-man crew ready to do the clean out, load the truck and and clear everything away that same day within a matter of hours. And that, you know, that that time factor comes into play. So some cases we are not as

efficient pr prior I should say cost efficient price wise compared to like a dumpster rental and doing the work, you know, with with labor loads. but that would be the same equivalent if you were renting a truck versus hiring a full service solution to to handle that work for you as well.

Dylan Silver (15:47)
Right. I mean it’s a matter of priorities. Is is is time and you know getting this done as soon as f possible or is is you know being the most cost effective and that’s gonna be two different solution sets. I wanna pivot to franchising though. Two hundred franchises is a huge number of franchises. ⁓ what was the journey like, not just scaling your first franchise, but the first hundred? How was that process and looking back, were there any, you know, moments, aha moments along the way for you?

Nick Friedman (16:57)
Yeah. So I’ll say that we probably started franchising a little bit prematurely. ⁓ we read this word franchising in a book, and all I could think about was McDonald’s and picturing, you know, our locations all around the country, but we hadn’t really proven out the model yet. So I would say I had kind of a little bit of a naive view of what franchising was really gonna be like and and the heavy lifting involved to be able to ⁓ set sell support and then scale a franchise business infrastructure.

Nevertheless, that’s the path that we ultimately chose to go down. And it was a steep learning curve. we surrounded ourselves with mentors and peer groups. We joined the International Franchise Association. So I think there’s a lot to be said about peer groups and and ⁓ you know, ⁓ masterminds and so forth, where you can learn from from other people that have done it or are doing it. And there’s also sort of ⁓ a piece being surrounded by people that are going through similar ⁓ experiences. And so ⁓ we started selling and supporting the franchises. It took us

A long time to to break even the 50 mark. We were averaging like five to six franchise new franchises per year. And then eventually we started seeing the momentum swing where we were our franchisees were having higher levels of success. That started attracting better quality candidates, quite frankly. And then we started being able to afford better quality people into our organization to continue to improve the systems and support of the marketing, the call center, ⁓ and so forth. And so

It’s proven to be a very viable model for our business. we’ve got some really successful franchise owners that have, you know, put up seven and in some cases even eight figure ⁓ businesses in this industry. And you know, it’s it’s kind of rewarding and fulfilling for me as a founder to think, you know, this this business has become really a platform of opportunity for both personal and professional growth. and and so that’s really the way that it’s it’s evolved and and turned into at this point. But

Definitely a steep learning curve. A lot of people will approach me. They’ve got a successful small business and they want to franchise it and they’re looking for me for guidance on how to do that now. And I’ll actually spend the first five, 10 minutes in some cases, trying to talk them out of franchising, even though it’s, you know, kind of contradictory for me to do that. ⁓ but I’ll I’ll suggest, you know, have you thought about opening a second location first and make sure that the model is proven? And if that second location is profitable, maybe you could open a third that’s also profitable because when you’re franchising,

You’re taking a small piece, that royalty stream. And so you need, you know, 50, 100 franchisees before that royalty stream can be sufficient to cover the overhead required to support the franchisees. So it’s it’s definitely a more complex model than I ever imagined getting into it. But once we were into it, it’s like we kept walking down the the the the the tunnel and you know the the light that we entered into was getting dimmer and dimmer. And so we had to wait till we started seeing the light at the end of the tunnel and finally we we made it to the other side.

Dylan Silver (19:44)
I was just gonna ask about ⁓ other business owners coming to you inquiring about franchising their business model themselves. I’m sure you get asked this often. What what are some of the biggest, you know, misnomers you hear? You mentioned, you know, you could look at a second or third location. What are some of the biggest misconceptions?

Nick Friedman (20:04)
Yeah. So I I think a lot of people don’t realize how much it’s going to actually cost because franchise as an industry is heavily regulated by the FTC. So you need a franchise disclosure document. It’s like a hundred plus page ⁓ legal document that you need an attorney to draft for you. ⁓ you need all your manuals and and materials buttoned up. You’ve got to start spending money to generate interest in the franchise opportunity. And so I’ve heard estimates as as you know, low as two hundred thousand, as high as a million dollars, just to be able to successfully start selling.

franchises, that’s what it costs to be able to to set yourself up. And you know, most small businesses don’t think of all of those costs compounding and piling up on each other. So we try to talk about that first and foremost. Secondly, the the expectation that hey, I’m gonna start selling franchises and my franchisees are going be as successful as I was when I started. But in many cases the founder has that founder mode energy. They’re you know living, breathing, eating this business every single day.

Somebody’s coming to buy a franchise or invest in a franchise may or may not have that same tenacity and relentless drive to execute the model. And then thirdly, the mod the model just really needs to be very buttoned up and and replicatable. ⁓ and that’s why I think having a testing a second or third location first to be able to prove that the model does work in another market, or you can hire somebody to run it.

⁓ as effectively as you did with your initial ⁓ pilot location is is probably the piece that that a lot of people miss when they think about franchising. We definitely missed it. And that’s why I said like it was a steep learning curve and we just kind of had to keep figuring it out and and and iterating to finally find ourselves up, you know, surfing the wave instead of getting tumbled in the surf.

Dylan Silver (21:43)
Can someone be a franchise owner without being an owner operator and active in the business, you know, just by delegating everything at this point?

Nick Friedman (21:51)
And

there so there’s believe it or not, there’s actually 3,000 different franchise opportunities out there and they span all sorts of different categories. We all are familiar with the fast food franchises, but then you know there’s there’s barbershop franchises, there’s other, you know, food and and retail and service franchises, not just you know, moving and hauling like us, but there’s you know, you name it, painting, pressure washing, HVAC, and so forth. most service franchises like ours.

Don’t lend themselves very well to what’s referred to as absentee ownership or semi-absentee ownership. Because you don’t have a four-wall business where your customers are coming to you, there’s so much you know, ver variety every day that takes place when you’re sending the trucks out into the community to do the work that having an owner, you know, back at the shop, keeping an eye on things, monitoring the dispatch board really does make a difference. and so we’ve had some scenarios where we’ve had people, you know.

look to invest in one of our franchises, but be really hands off. And as long as they have somebody that’s maybe going to be an operating partner, then it can work. Maybe like a a a you know minority shareholder that’s going to run the business ⁓ day to day. But if we if they don’t have that, then it can be very difficult because again, you know, it’s not putting up a sign, putting up the four walls like a restaurant and waiting for the customers to come to you. We’re actually sending our crews out into these customers’ homes and, you know, every house is different, every job is different. So

I’ve seen that most service franchises don’t lend themselves to the absentee owner. It’s better for somebody that’s gonna have some some oversight of the business in those cases.

Dylan Silver (23:23)
We are actually coming up on time here, Nick. Any new projects that you’re working on, and then also anything you’d like to mention directly to our audience.

Nick Friedman (23:31)
Yeah, so w one other side business that I should side business, it’s gotten to be pretty big. It’s not a franchise model, but something that we we embarked on is a company called Butler Plus, which is a service specifically for multifamily properties. ⁓ it provides doorstep valet trash, it provides pest control, ⁓ pressure washing, as well as apartment turns. And that’s a business that we sort of incubated about 10 years ago when we were, I think, getting a little bit of entrepreneurial ADD and we started chasing other shiny ideas, and that one actually started.

taking off. So we brought in some outside capital for that business. We hired a CEO and we’re actually servicing roughly 300,000 apartment units a night in that business, primarily with the doorstep service. But we started adding, as I mentioned, those other offerings as well, pest control and and pressure washing and so forth. And then for the college hunks business, you know, I it I think that we’re just going to continue to grow our franchise ⁓ footprint.

continue to expand our our capabilities in terms of long distance moving and and national accounts, corporate move accounts as well. but, you know, for the audience, I would just encourage everybody to continue to on the path of of the journey that you’re on. The whether it’s real estate investing, development, flipping, ⁓ or, you know, all operating businesses, it’s it’s it’s just really cool to see people continue to engage in a in a you know support system like this and and just get better every day.

Dylan Silver (24:49)
Mike, thank you so much for your time today. Thanks for joining us.

Nick Friedman (24:51)
Yeah, appreciate it, Dylan. Thank you.