How to Own a Franchise and Keep Your Day Job (2024)

Introduction

Patrick: Hey, Patrick Findaro here, co-founder at Vetted Biz. Very excited to have on Josh Ambrose. He’s the franchisee of Mosquito Hunters in Jacksonville as well as St. Augustine area in Florida. Josh has a pretty impressive background, both in the military as well as corporate. We’re going to learn from Josh in terms of how his background has applied to franchising, entrepreneurship, how he got into franchising, what it’s like running a small business as well as other information that you should consider if you’re thinking about going to franchising yourself and making that leap from the military or from corporate life into franchising. Josh, thanks a lot for joining today.

Josh: I appreciate it. Thanks for having me.

Patrick: Maybe you just tell me a little bit about your background and for the audience that’s listening.

Josh’s Background

Josh: Yeah, certainly. I never saw myself as a business owner ever. I joined the Marine Corps straight out of high school, barely 18 years old. And I was enlisted for about seven and a half years before I became an officer. Did 24 years at the Marine Corps before I retired last year. And trying in my transition process of transitioning from military life, which I’ve been doing for so long, to civilian. I started networking, I started finding out what was out there. And I came across Amazon’s DSP program where it’s like a franchise relationship without all of the costs and the fees. But there was no territory here where I was in Jacksonville, Florida.

I had another buddy that flew in the Marine Corps with me, and he got out and he was a pilot for Delta and it was during Covid when people were getting furloughed and laid off and he was like, “I’ve got to figure out something else to do.” I told him about Amazon’s DSP program. He lives in Atlanta. Same problem for him, the only territory available for him was in like Knoxville, Tennessee, and was just too far to drive for him.

Patrick: We’ve looked at it, we’ve analyzed it. It’s pretty low startup cost for the profit potential.

Josh: Absolutely.

Patrick: The issue is the territory, there’s not much available.

What is a Franchise Broker?

Josh: Yeah. And as soon as one becomes available or even before it’s available, it’s gone. You kind of have to get in early if you can. I told him about it, and he told me he looked into it, he applied. The only thing closer to him was Knoxville, Tennessee, it’d be like an hour and a half commute. He was like, “I can’t do that.” But he said, “I am talking to a franchise broker.” I’m like, “What the heck is that?”

Patrick: Yeah, what is that?

Josh: He started talking to me about it, and he was like “Listen, we work with a franchise broker. He’s like helping me figure out if there’s something that could fit and work for me.” I told him “Well, tell me a little bit more.” He told me about it, and it ended up being Bill Easton, who he connected with me, with who I got connected to you.

Patrick: Exactly. Part of a franchise broker association. I had met him at their big event last November and had him on the podcast not so long.

When do you pay the Franchise Broker?

Josh: And Bill’s a great guy. What I like about a franchise broker is, if you don’t know what you want to do or if you don’t even know if it’s for you, they help you through the whole process, the personality, assessments between him and my wife. I mean, my wife and I doing it with him, whittling it down to two or three, then looking at the FDDs and going through the process. And the beauty of it all is, I don’t pay Bill anything. Bill makes his money off of me actually purchasing a franchise.

Patrick: Like a realtor essentially.

Josh: Yeah, exactly. It’s a great relationship if you’re a franchisee. I’m a huge fan of that. That’s how I kind of got involved in franchising. Never thought I’d be a business owner.

And I absolutely love being a business owner, but it’s challenging. It keeps you busy. I would say that it’s not for people that don’t have drive. If you don’t have drive, being a business owner probably isn’t for you.

But it’s got some of the best tax advantages out there. And, that’s how I got to where I am right now. Now I purchased a Mosquito Hunters.

Tax Advantages

Patrick: Probably like, you see a lot where one of the spouses is employed and is getting a W2 paycheck, and then the business owner’s compensation is up and down. There’s equipment you can depreciate, tax benefits. When you’re married, that marriage of having a business owner as well as an employee can be a good option for your family.

Josh: Or even better, my wife has W2 employment income. I have W2 employment income because I work full-time with a bank. I have my retirement for the Marine Corps taxed. So, I have those three items that are taxable that I was able to use…especially in your first year of the expenses you have in your first-year, franchise fees and everything, territory fees, startup costs, I was able to get $18,000 back in taxes and we didn’t even depreciate everything off yet. We pushed some stuff to follow one year. Huge fan of the tax advantages.

The importance of an adviser when owning a franchise

Patrick: And who helped you with that? Was it your standard accountant that you had been working with in the past or did you bring someone in?

Josh: So twofold. One, I read a book that I like to tell everyone about called “Tax-Free Wealth” by Garrett Suton. Huge fan of that book. That’s how I opened my eyes to the tax advantages and how tax codes are mostly written, 95% of it is written to teach you how to save money. And then my next-door neighbor.

My next-door neighbor is a CFO for a large insurance company who has been doing taxes for people for a while. Him and I are good friends. He’s helped me understand QuickBooks. He helped me understand how to depreciate and why to depreciate. To make decisions such as if you’re going to get a new vehicle, do you want to depreciate it with mileage rate or do you want to depreciate it with the entire amount? But it depends on the situation. So you need to have somebody, no matter what. You cannot figure it out on your own. You need to have somebody that’s giving you, they might not need to do your accounting for you, but tax advice is almost a must because you’re missing out on dollars if you don’t.

Patrick: Yeah, it sounds like that. I imagine a franchise business owner making like 80K, 100K, but if you add in all the tax benefits, it could probably shoot up to another 40K, 50K when you look at how much your family is making and saving.

Josh: Right. I mean just lost opportunity cost right there.

Becoming a business owner

Patrick: And tell me…I’m curious because going from enlisted to officer, that’s not common, is it?

Josh: It’s not that common, but I feel like 30% to 40% of the officers were prior enlisted at some point now. And it wasn’t easy to do. I got accepted for a program, but in order for me to even get to that point, I was taking a lot of night classes on my own, showed a lot of initiative to get there. But I was blessed with the Marine Corps. The Marine Corps’s been good to me. They paid for my bachelor’s, paid for my master’s degree, everything.

Patrick: That’s huge.

Josh: I’ve got no complaints.

Patrick: Yeah. But it seems like your level of determination that brought you to like being a business owner started early in your career. Like doing night courses and everything outside of the hours that you were working in the Marine Corps to get to the next level.

Josh: I would even argue before the Marine Corps. The Marine Corps helps push you and make you go further than probably what you think you can. But, probably how I was raised watching my dad work his butt off, that inner drive to work hard. I was working with him at like 10 years old doing stuff.

First jobs

Patrick: What type of business did he have?

Josh: He had two jobs. He worked full-time, like me, at a hospital as a purchasing manager. But then he also, on the side, cut grass to support our family. I would help him cut grass and stuff on the side and at a young age.

Patrick: Started earning at 10.

Josh: Yeah, absolutely.

Patrick: That’s impressive. There’s a lot of like controversy. I had my first job at 15, but I feel like just where the country is going and I don’t know if it’s with the woke movement that kids should be coddled until 22 before they do anything.

Josh: No. I mean, it’s tough, right? Because I was just having this conversation with my neighbor who does mostly my taxes and we work hard because we want to provide better for our kids. But there’s a fine line from them not experiencing any sort of hardship and drive. You want to give them, but you don’t want to give them too much because you don’t want to stifle their drive.

Patrick: Yeah. And then if you’re not driven and you’re given too much, I think that’s where people get into bad stuff with drugs and just different abuse, where there’s no drive and no greater purpose.

Josh: Absolutely. It’s tough.

Patrick: It’s definitely a fine line. I’m a father just of one now and my daughter’s pretty young, but it’s definitely things to be thinking about and how to instill those values.

Josh: Yeah. I feel like, I’ve been able to somewhat kind of do it with my daughter. She has chores and responsibilities. I’m like, “Hey, you’re going to go clean your guinea pig cage, not me today.” Literally…this morning that’s what she did.

Choosing between franchises

Patrick: And what other franchises were you thinking? You don’t have to give names, but what piqued your interest in this specific industry?

Josh: Just had this conversation last night with another neighbor about why I picked this particular franchise, but more so why I picked the industry, and a few things. One, the startup costs were not high. I didn’t have to build out a building or lease a facility, anything because it starts off as a home-based business. That in itself is amazing because you can start it from your home. The only calm complex part of that for me was in the HOA that I live in. Here in Florida, HOAs have a lot of power. I could not keep my logoed vehicle in the driveway, so I had to get a storage shed, move stuff out of the garage so that the vehicle could park in the garage.

Patrick: And that’s some money that you could be getting just people drive by and they’re like, “Oh, I’m going to give him a call.”

Josh: Absolutely. Home-based business was important. Recurring revenue was important to me. One of the other franchises I looked at had to do with like a painting company. And if you think about that, how often do people need their houses painted? Once every 5, 10 years?

Patrick: Yeah, it’s a one-off expense.

Josh: That means you have to put a lot more money into marketing because every customer you get is essentially a brand-new customer or a referral. I wanted recurring revenue where I could get customers and the customer count goes up, it goes a little bit down, you lose about 16% and 20% of your customers the following year, then it goes up and it just keeps staggering up more and more. That was important to me, recurring revenue.

Buying a Franchise: Territories

Patrick: And the assets going to become more valuable, where you have your Mosquito Hunters and you’re dominating around Jacksonville, St. Augustine, all over St. John County. Some bigger fish might want to buy that for a better multiple because there’s consistent customers rather than just one-off customers.

Josh: A franchise just sold, and I think she was in her fourth year for like over a mill. And I’m like, “Hmm.”

Patrick: That’s solid. And probably what’d it cost 80K, 100K to open?

Josh: Well, it depends how many territories you get, you know. I will tell you that I found it’s hard to get into the green quickly in this industry if you only have one territory.

Patrick: Most recurring businesses are like that though, with just one territory.

Josh: Right. I think you need at least two. Sometimes it’s hard to manage three or it’s hard to come up with the funding cost because the number of territories you have dictates how much you spend in marketing each year. It all depends on the franchise, but for us, it’s like, a certain amount for year one. Well, now that you have two territories, you got to pay for both. And then if you had three territories in year three, you pay for all three. And then it stays at that level of marketing. But I’ve watched some franchisees struggle to grow as quickly as they wanted to if they’ve only had one territory. I have two territories and I think it’s just right for right now.

Franchise Support

Patrick: You open up, I imagine the franchise organization gets you trained. And because it’s a home-based business, you can open up pretty fast. What kind of support do you get to break even and then making some money? Are they providing you leads? Do they help you with the marketing campaigns?

Josh: Yeah. The marketing is done at the umbrella company level. So, Happiness Brands owns Ecomaids, Lawn Doctors, Mosquito Hunters, and they’re looking to continue to grow. And the marketing done at the umbrella level, it’s like varsity-level marketing, and the marketing dollars go further. And I do mean that because when I was going down this path, I almost signed with another Mosquito company. I’m not going to say their name, but there was some ethical issues they had because they outsourced their franchising to another company, and that company only cared about how many territories they sold. Nonetheless, that relationship they have is gone because now they sold to an umbrella company just like Mosquito Hunters is under.

Negotiate prices

But if you think about this, the reason Costco and Walmart can drive down prices is because they do things in bulk. Well, it’s the same concept. When you have 1200-plus franchisees that you’re purchasing SEO content for, you can negotiate prices down. Your marketing dollars go further. But also they know where to outsource expertise. They have people that kind of oversee the things…

Patrick: And they can afford to. You can’t necessarily afford to outsource a copywriter at, like, $1,000 a month.

Josh: Not at all. And they know where they’re good at. So they can outsource like the number one, the number two people that do things in the country. They use a company called Kigo that’s been number one and number two at SEO for the longest time. And then some of the other things they do is such… Like, when I was going through that, I thought the other company, I was like, “Man, they got their marketing down.” Then I was like, “Oh, well, they’re nothing compared to…”

This company, they’re so advanced that when it rains in our territory, they will dial back on the pay-per-clicks and the Facebook ads because nobody wants to think about mosquitoes when it’s raining. And then a couple days later they’ll ramp it up because that’s when the mosquitoes are causing a problem. I mean it’s pretty… They have a new thing…

Patrick: Yeah. That’s crazy.

Marketing campaigns

Josh: …where they can get…now they can capture people’s emails when they visit the website and then start a drip campaign of targeted emails to them. A lot of great things. But the one thing that separates Mosquito Hunters from the competitors in the industry and sometimes even outside the industry is the ground game. And I had never heard of the ground game and, because I was knee-deep about…I finished discovery day with the other company, I was about to sign, and not once did they talk about ground game. So ground game in the Mosquito Hunters, so if you believe in the theory of seven marketing touchpoints before a customer commits to a purchase, they help speed up that seven touchpoints through the ground game.

ou’re already doing Facebook ads, Google pay-per-clicks, you’re getting Google… all these different centralized media that they’re doing direct mail, stuff like that. And then you help bolster that by doing ground game, so putting out a certain amount of door hangers, putting out a certain amount of road signs. We have a Gunther mascot head that’s like $1,500 that will park our van and we’ll do parking waves with it, and it gets everyone’s attention. And then also getting Google reviews, because Google reviews is probably one of the top ways to improve your SEO organically.

Patrick: Yeah. It’s the same company and they’re going to judge those reviews. A lot of people don’t know.

The mechanism

Josh: I didn’t know it until I started doing that. They have minimums they want you to meet, and I mentor three new franchisees and I tell them like, “Listen, if you want the minimum, do the minimums they recommend.” So, they wanted us to do like 10,000 door hangers and 200 road signs and get 50 Google reviews, and I’ve like tripled those numbers each year.

Patrick: So how does it work, like the mechanics? Like, the lead comes in, do they have a call center or does it just go to you or a member of your team?

Josh: Yeah, they have a call center. It’s called the Dojo. In the Dojo, sales across all three brands right now. And if they can make the sale, it goes into our CRM that we have and they send it to us through the CRM. If they can’t make the sale, they’ll still send it to the CRM. Like, let’s say they can’t find a lot size to give them a proper estimate or they can’t get ahold of the customer after.

Patrick: Then you and your team have to go out and close the deal.

Josh: Yeah. Or we don’t have to go out, I know exactly how to find a lot size. I know how to look on the county property records for the two counties I service and find it, whereas they’re not going to know that nationally.

Patrick: Okay, that makes sense. So, they sign an agreement and then you go on-site and start… I imagine the first meeting is super important because you want to retain the client for many years to come.

No contracts required

Josh: Well, we don’t have contracts and that’s one of the best selling points we have. You know, some of our competitors want you to sign up for this season and pay for the season. Matter of fact, the one I was going to go with previously, that was their technique, we don’t.

Patrick: That’s a sticky point.

Josh: Yeah. We just say you enroll.

Patrick: I don’t like signing… As a business owner, I don’t like signing contracts. And then on the personal side, I’d prefer not to.

Josh: Yeah. So we just tell customers “Hey, we don’t use the word sign, we use the word enroll because when you enroll into this seasonal program, we’re going to come out every three weeks unless you tell us you don’t want us to, you just pay after each treatment.”

Customers Attention

But back to your point about the initial meeting, we go out of our way to have a personal relationship with the customers, not just at the initial meeting but constantly. I’ll give you an example, and one of the beautiful things about Mosquito Hunters is that we have these weekly calls with fellow franchisees. Not only have you bought into a system that’s proven and it works for a lot of stuff but then you’re constantly meeting once a week and sharing ideas and you learn from each other.

And I even learned from one of the new guys that I mentor, a great thing that I do, that goes into just putting us a little bit above our competitors. Because the pricing is about the same, the treatments are about the same, so the only thing you could do different is your interaction. And do you make them feel like they’re family? That’s the only difference for the most part. So, he taught me, he goes, “Hey, in our leave behind material, I started giving dog bones.” If I knew they had a dog or I heard a dog, I go, “Man, that is genius.”

Patrick: And now after this pandemic, everyone has a dog.

Josh: Everyone has a dog. And I did not know how many people love that until I started seeing them.

Patrick: What’s the cost? Like 5 cents, 10 cents?

Josh: Exactly. And it’s just one small thing.

Patrick: The value is like $5 or $50 and the cost is like 10 cents.

Continue watching this interview on our Youtube Channel.