Episode 19: Scaling a Franchise – Kyle Chiasson on Restoration Business Growth

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as many of you know the Franchise Business
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to assist aspiring entrepreneurs
looking to invest and operate a franchise
on today’s show we have Kyle Chason
President of Best Options Restoration
also known as Bor for short
welcome Kyle thank you for having me
Pam and Cherry it’s good to have you
yeah so before we get started Kyle
I’d like to tell our listeners a little bit about you
you are a business leader and entrepreneur
with expertise in franchising
business development and operational strategy
you were the first franchisee
and the best option restoration system
I thought that was cool that’s right
that is super cool
and have so therefore you have approved uh
what it takes to scale
and exit a business in an actual franchise system
so uh
needless to say
you have played a pivotal role in helping
Best Option Restoration
achieve sustained growth and operational excellence
and are dedicated to empowering the
franchisees and entrepreneurs to succeed
so that’s really nice uh
due to the combination of your hands on experience
and forward thinking approach
you have become a trusted figure
in the franchising industry
so good to have you on the show
and uh I think this is a really great segue
Kyle for you to share
a little bit of the backstory of best option
restoration
yes so Best Option Restoration was founded in 2016
and I
I was in banking at the time and wealth management
I was in it just long enough to know
I don’t know anything about the industry
and I happened to meet our founder
Nick Anthony Sammons
who founded one of the largest biohazard and trauma
clean
trauma scene clean up franchises
and he noticed an opportunity where
there was a much bigger market at play
which was the restoration industry as a whole
and he was just getting a best option
ration off the ground in twenty
uh 16
2017 when I happened to uh
meet him and long story short
I quit my banking job and I started a
started the first franchise
wow that’s a different environment hahaha
yeah much
much different I
I knew enough to know where I was
but while it was a great place I was at it
it wasn’t where I saw myself in
in just a couple of years
and I had always wanted to do my own thing
so uh
long story short met met the founder
met Nick Anthony and I uh
quit my job and off to the races I went
and here you are as the president
and here I am almost a decade later
I love it I love it
hey go ahead and explain uh
best options restoration business model
explain the business model to us
yes best option restoration is a home based model
which means it has low overhead out of the gate
it really allows our franchisees to scale and grow
with us typical franchisee is starting with one van
box truck so one primary vehicle
and a lead technician
who’s gonna take jobs a to Z for him
so I’m looking for folks who uh
want to work on the business
we call it shaking hands and kissing babies
but they’re really a a hero in their local community
because best option restoration
I’ve been to the er myself a few times through
through my life and as
as most people have when you need the er you
you need it now it’s an
it’s the emergency room for a reason
that’s who we are to the property space
so when clients call us they’re having a very bad day
and our franchises get to be
you know the
the hero of the day
and really take them through a difficult time
and get that property restored
I like that and it is the focus on water mold
fire like
kind of give us an example of an emergency situation
yeah
so I’ll I’ll paint a picture for you so water damage
fire damage
and mold remediation is the bread and butter
there’s more we do I’ll share share that momentarily
so think that you just had a great night sleep
and you are you have your coffee maker set
to automatically brew you a fresh cup
you walk downstairs
and your kitchen ceiling is on your countertop
you have a pool down in your basement
and it doesn’t smell like that great coffee smell
it’s it’s musty water
because you had a leak that happened overnight hmm
that is an emergency it’s a large situation
80% of the work that we do goes through insurance
so they’re picking up the phone and that that uh
homeowner or could be commercial property
but that homeowner is calling their local best option
restoration franchise out
and they’re coming in and stabilizing the environment
and ultimately putting that property back together
and that’s a standard water damage
emergency that we solve okay
that helps paint the picture all right yeah
yeah I hope you never have to you know
we’re here if you need us
but I hope you never have to call us
we all need a hero in those occasions that’s yeah yeah
well you kind of touched upon something
you mentioned it’s insurance based
talk to us a little bit about revenue streams
how how does that work
yeah so the bread and butter which I
I mentioned is water damage
fire damage and mold remediation
the great part about we focus a lot on water damage
and the great part about it is it’s equipment heavy
and you charge for that equipment
and equipment doesn’t have any feelings
it’s not late for work it rarely breaks down
and it’s there when you need it
and this is why the profitability is
you know is so strong in the franchise system
but when we dry structures out
while there’s some labor involved
it’s very equipment heavy
in addition
something that Best Option Restoration does differently
is we are the only franchised restoration company
with Thermal technology and that’s a fancy way to say
we’re drying structures out in half the time
as our competition
so you think about drying your clothes out
and last time I I air dried something
it took 4 hours to dry out
and I was I was very irritated
I’m kicking my dryer I think something’s wrong with it
but it’s cause I don’t have heat
I then apply heat to the cycle
and it’s dry in 45 minutes
and that’s just the science of drying
that we’re applying to dry structures out
and not only do we have a great brand name
good reputation a strong culture and a franchise system
but we truly have a differentiator in the marketplace
and it makes everyone else just a man in the van
with a fan as we like to say hmm
that that is a big differentiator
so when you think about uh
did you call it Thermal am I using the right word
yes yes
yes Thermal’s correct Thermal OK
so when you think about that
and I’m gonna take it from a business owner standpoint
when you said that you cut the time in half
does that mean you’re able to do more jobs
as a business owner
you nailed it so not only are your jobs more profitable
but you also
have the ability to perform more jobs in a week
because you’re not spending as much time on one job
I follow you that’s great for the franchise owners
thank you for picking that up haha
would you classify would you classify uh
I guess
your business offering is being more project based
uh cause it’s definitely not subscription based
yeah we we have a nice blend of the two
so as homeowners it’s it’s a lot of project based work
but in addition entering the commercial sector
we are getting master service agreements with
commercial properties um
so think your you know
your local multi housing apartment community
or you have an office condo with
you know
with a bunch of independent businesses that have an HOA
over them we’ll have and though that agreement
while the water damage
you never know when it’s gonna happen
what we know is it’s going to happen
there’s seven or three water jobs
per hundred thousand people
every month so it will happen over the course of time
so there is a residual model
in addition to a project based model in what we do okay
good to know uh
well let’s talk a little bit about the customer base
I you know
it’s broader than I thought of right
um hmm
let’s talk a little bit about customer acquisition
how do your franchisees
go about acquiring their customers
yeah we
I I’ll tell them that marketing is a team sport
and what I mean by that is
there’s some things we can do for them
and help them with
and there’s some things they need to do on their own
for example uh
we have a
a national accounts with third party administration
think insurance carriers
that are gonna send work directly
franchise has to respond to the work
but they’re you know they’re sending us the work
and we get in as part of the
the best option brand name
secondly we have lead generation program
so there’s
six to seven different funnels
that all drive these emergency calls
and it’s a high closing rate
because unlike other home services
where people are saying
maybe it’s a landscaping service or a plumbing service
or an HVAC service or handyman
they’re getting two to three to 4 to 5 bids
and they’re comparing all of them
and trying to sort something from it
with us they need us now
and they’re not getting bids because we’re
gonna work with their insurance company to get it paid
so it’s just about showing up and that’s why the
you know these projects have a very high closing rate
compared to traditional home services
and it’s it’s very unique
the last way and I kind of touch on it
but it’s meeting with insurance agents
property managers and plumbers
and that’s where we teach our franchises what to say
when to say it
how often to talk to them and how to track it
we have our own proprietary
CRM and project management system okay
and so they’ll track it in there
but they have to go shake the hand in
in that situation
so we look at it as if you have a boat
and maybe it’s a big cruise ship
we know there’s fish somewhere around it
and so we’re gonna cast lines out all around the boat
and we don’t know
at which point is the fish gonna grab
which line but we know they’re gonna grab a line
so we cast many lines in the water
to ensure that we catch fish
which is an analogy
we love analogies to say the works out there
there’s more work out there
than there are people doing it
and uh we
we assure that with the
the plan that we have to acquire jobs excellent
so of course I love analogies too
I’m gonna
now I’m gonna flip to the other side of the equation
right we just talked about customer acquisition uh
anyone that’s in a service oriented business
know that you also have to have employee acquisition
yes haha
talk to us about the recruitment
and the retention of your employees
yeah so the your leaders are gonna stay for a while
they’re here to stay and when you get started
in the first 90 days to 180 days
franchises are finding a lead technician
and we teach them how to find them
what to look for you know
here’s the interview process with them
ultimately
something you’ll hear s a is we make recommendations
you make decisions
so I’m never gonna force somebody to hire
you know a certain individual
it’s their choice cause it’s their business
they’re in business for themselves
just not by themselves so they’ll find that key leader
now let’s say they’re on a project
and they need eight guys it’s a massive project
and they need eight to 10 to 12 guys to help say
remove drywall and move equipment around
maybe extract water
we have national skilled labor available
so they can say hey
I need 10 10 guys tomorrow and they’ll
you know they’ll bring those guy uh
those guys next day who have experience in in uh
restoration work so this happened
we had uh
our Tampa franchise had a Hurricane and they needed
they had 20 guys you know
on a skilled temp basis working for over a month for
on all the Hurricane claims
that makes sense one other quick question
since we’re talking about the business model yeah
are there any state licensing
or certification requirements
uh there it’s
it’s gonna be state by state so most states know um
all of our franchises are certified
by the Institute of Inspection
Cleaning and Restoration certification
and that’s part of our training process here um
that they will come to our owners training as well
where we take them a to Z
through everything there is to know about the company
but then some states like Texas has
they do have an additional licensing process
for mold remediation water damage is
is typically none additional required
unless you’re California you
you do need a a certain license California
but we have a great process for that um
so most states no
but some states yes and when they do we we uh
help them through it sure okay
now that makes sense and obviously you
you already tapped into it a little bit
when you’re getting into franchise
one of the greatest thing is
is that you get to build your own business
build your own asset to hopefully sell down the road
but you get so much more support and training
underneath the franchise umbrella
so you’re not in business by yourself
uh you’ve got somebody you can kind of turn to
and ask questions yes
so
let’s get a little bit into BOR’s training and support
how how do you support these
franchisees to get their doors open
and to feel good about what they’re doing
so we
after I’ll start with training and I mentioned it here
but I’ll clarify
and then I’ll move into the support side of it
training is a two week program
where one week is more of the insurance
standards training
and then the next week is the owners training hands on
right here in Denver
Colorado at our headquarters and we get them on jobs
we we we have uh role playing scenarios hiring
marketing invoicing
insurance companies project management
HR I mean the the whole gamut of the operation um
is taught and the reality is
and I’m guilty of this too
when I’ve gone to classes
you’re gonna remember 18 to 20% of what you heard
and so this is where all the support kicks in
and the beauty of franchising is the support
yep
we keep support simple around here
and you can go talk to any of our franchises
if they ever need to talk to somebody
we’re very available we actually have a simple rule
if they have an emergency
we’re in the emergency business
they have an emergency
all they need to do is this is my cell phone
they can call me right here
if I had a call right now I would pause this webinar uh
no disrespect to take it from a franchise
cause that’s a that’s who we take care of
um so they call
they can email if it’s something they need to know
you know within 24 hours and if it’s not urgent
but maybe they want to know in the next hour
it’s simple as shooting a text message over uh
we also have um ongoing zoom meetings and A
and a private group with our franchise owners on
on it’s a through Facebook um
so there’s many communication channels
not only for reacting to
business issues that are gonna come up
maybe new challenges on projects
but also to communicate
and build culture amongst our franchise group
yeah and we have oh
sorry go ahead Cheryl no
you go ahead Kyle I’m sorry
oh I
I was just gonna say I you know
I have almost a decade of experience running
running a franchise multi unit
I’ve exited in addition
our director of operations who you
you guys have met Brian um
he he’s been a franchise owner and has uh
not only experience in
in the invoicing world of insurance
but has ran a franchise himself
and has been in the franchising space for a long time
as well as our franchise liaison and our founder
and there’s a a lot of support around here yeah
I I
one thing I do hear from existing franchisees uh
outside of the training support that you talked about
what they love is just the community having uh
fellow uh business owners
doing the exact same thing that they’re doing
just in a
different place and just synergizing and sharing
yeah and so you’re not yeah
you’re not having to figure it out on your own
which is great exactly
and that
my favorite week of the year is our annual meeting
which is every November
and we get all of our franchise owners together
and there’s education and speakers and uh networking
but the best part is the hugs and the high fives
and the camaraderie that exists amongst the group
um it’s such a beautiful time of the year
and you also uh you also mentioned in
earlier
that you have some proprietary back office systems or
yeah yeah
we actually built our own software
and project management system
so the the market solutions were not uh
meeting the needs of our franchises
nor did I like more importantly the
the long term future of them
so now we put us in the driver’s seat and we actually
you know get to work with our franchises to continue to
cause technology is so important nowadays
to continue to build out exactly what
not only we need next year
but what we need in the next five years
and it’s it’s a
it’s very unique to the franchising space and
and to restoration as well
yeah I would think that’s unique
so that’s kind of cool yeah
you guys have built it out
very specific to the demands of this industry yeah
all right
let’s go ahead and get into some franchise growth here
can you give us an idea of um
how many franchisees you have territory sold
anybody doing multi units with you guys
yeah we have 73 franchise uh sold
we’re we’re training another three next month and uh
pipeline is strong so probably will be 80
80 to 90 by the end of the year okay
um the great part about where we are with best option
restoration is we
while we have a very strong foundation of 80 units
there’s no area that we’re sold out of
and there’s a there’s a huge runway for growth
so we’re not we figured it out
we need people who want to come
follow the plan
and be coachable and execute on the model that we have
and you know
we’re entering new markets every day
oh I know
I love that the space that you’re at is a great space
for exactly why you said it
there’s there’s still
that franchise system has been tested and proven
yeah and you guys know what you’re doing
but you still have great tier 1 territory available
yes that
that’s it that’s what I call the sweet spot
yeah it is
it is the sweet spot you nailed it cherry
it’s absolutely is the sweet spot
do you have now that you’re in your sweet spot
you’re kind of thinking of future growth
what’s your vision
what are you thinking about for the future
we we wanna continue to dominate and take
market share for our franchises sure uh
we’re
continuing to be recognized as the leader in disaster
restoration because we do things different as well uh
that’s part of why we kind of see hockey
stick growth in our in our franchise group um
if you think about a hockey stick on a chart
you have the ramp up and then boom
you take off like a rocket
and we wanna continue that path
and you know my goal is not only continue
helping our existing franchises
get bigger but in addition
I want to continue to enter new markets
a lot of space in Chicago
we’re not in Louisiana yet um
I’d I’d love to be in Memphis
I’d love to be in Oregon
we’re getting registered in California
so there’s a lot of exciting
exciting things ahead on the on the growth side
and I’d love to have 100 franchise owners
with 300 units sold
so multi unit is encouraged
we have multi unit owners now
but it’s always great when somebody
not only commits to to joining the board family
but they also grow within the family
and when they’re expanding to
to get another area you know
there couldn’t be anything that’s more in
indicating
that they’re doing well and growing in there franchise
I love that that’s good
um
alright what about a franchisee
some of your who who are you looking for
what’s your ideal profile for somebody to step in
and maybe get
more than one territory and really kill it
so I’ll tell you
I’ll start with what we’re not looking for
and that’s a specific background
and what I mean by that is we have HR folks
and we have sales people and bankers
and private equity folks and we have managers
engineers software people I mean
there’s a gamut there’s husband and wife teams
there’s a gamut of different types of people
that are in the system and
and who are successful
but the common traits is what we’re looking for and
and so uh
one thing is you know I’m looking
for people who really want to build an investment
you can come in and be be a be a really good operator
we have them and
and they’re making more money than they have
and they’re happy
but I want people want to build an investment
so when they exit we’re talking retirement
what that ins uh entails is when someone is coachable
they want a proven system and they’re willing to
to take some feedback
and I don’t want them to think respectfully
I don’t want them to think
because I don’t need them to
because we have the plan
I want them to come alongside me
and execute that plan with us
the other side they have is
they’re willing to get out
and be a face in their community
and as they scale it out we start with owner operator
but you know it
it definitely moves into semi absentee
and even absentee as the team builds up
but in the beginning
it’s typically franchise owners focused on
driving business and
and in the beginning you wear a lot of hats and we
we trim a lot of those hats down for him
but you’re still a business owner
and then scaling that out
to where they’re in a much more strategic role
and they’re really steering
the different managers that they have in place
nice yeah
we always like to give an idea of what
a day is gonna look like for that franchisee and
and what you said
it sounds like is it looks different in the beginning
which is standard
than what it’s gonna look like maybe two
three four years down the road uh
but for the listener that’s you know
some of you listening
what what is it gonna look like this that first year
so in yeah great
great question in the first year
kind of talked about
the challenge for a new franchise is
they’re wearing a lot of hats
so they may have a emergency call that they respond to
Monday morning and then Monday at 3:00
they might be at a chamber of Commerce event
or they might have a meeting with an insurance agency
and you gotta take your production hat on and put your
uh relationship building hat on right
and I used to carry you know
baby I’d take a baby wipe shower
if I had a job in the morning
it’s just the the the peek behind the curtain um
but my point is dynamic in the beginning and then you
you hire and
and some people hire right out of the gate
and they have that lead tech
so they’re taking production off their plate out
out of the gate which is fine with me
because if you simplify the business model
you’re either on a job or you’re marketing and
and building relationships in the community
so if you cover the job portion by the lead technician
you got you got one job to do
so your day to day in the first year is on projects
or meeting with agents property managers and plumbers
and attending a business leaders events
and different things in the community
as you scale it out the the I always like year 2
year 3 cause you really
each franchise owner is a bit unique
and how they want to scale
meaning if they like being on the Ops side
we can hire the sales team instead right
they love being on the business development side
will hire the production team
and then you know
the last hire you’re gonna make is
when you start adding the
the sales force under them
so each year
you take a further step back as a franchise owner
and I love that there’s a path to semi involvement
yes there and I’ve done it
I I can
say there is not only cause we have the playbook
but I’ve I’ve personally done it myself very nice
so I guess let’s talk a little bit about the numbers
I know this is an asset heavy
I would say business model
what’s your estimated initial investment look like
and can you walk us through that
yeah so uh
what they’ll pay us is a hundred and seventy thousand
the all in investment which
which is really the question is right around 200
225,000 okay
the what they get with the 1
70 is you get the business in a box proven
scalable model but the highlight of that is
you’re gonna get
enough equipment to do four jobs at one time
and I don’t know if either of you had a
a restoration project at any of your properties before
I sure hope you have Cherry well
you know it’s a lot of equipment that you need
so four jobs worth is a is a large amount and then uh
they’ll go get a a box truck or a van as we
we kind of hinted on that early um
and they get it wrapped
and the rest is working capital fabulous
and
what about common approaches to funding the business
common approaches to funding the business
and we have few different options
we are represented by the SBA
which is usually the default Assumption by candidates
and what a lot of people are familiar with
that’s a fine route I have seen trends though
where it’s taking longer and longer
this is not a borrower thing
this is a SBA lending thing
that it’s taking longer to get deals done
so we also have awesome
unsecured lenders that we work with
unsecured uh loans with lenders that we work with
meaning they’re not gonna collateralize the property
and they can get deals done in 10 to 14 days
I’ve had franchises who recently started go this exact
exact route and then were raving about it
and every now and then we also get a
maybe somebody has a uh uh
4 0 1
k or retirement account
that they’ve accumulated a good amount of uh
wealth in a couple hundred thousand
and they roll that over and
and put that into the franchise
so there’s many routes we can take um
but the the hottest one as of late
has been this unsecured route
and even for people who wanna pay cash
but maybe if there you know if they can get 100 grand
they’ll take it and so they’ll go that route and have
you know a line of credit sitting there
in case they ever need it to grow
great information on best option restoration and uh
what it would mean to get involved
as a franchise operator uh any additional thoughts
any questions that we should be asking
that I didn’t ask
I’ll share one one uh one story here um
we have a Rolex this is an insider challenge
we have a Rolex challenge for first year franchises
and if if they hit
seven figures in their first 12 months in business
at the annual meeting that I talked about
where people are uh
networking and shaking hands
and giving hugs and high fives in front of
at all 75 locations
they’re awarded a Rolex and and it’s engraved
you know that they’re in the million dollar club and uh
it’s my
my most prestigious and favorite trophy to hand out
but we awarded five of them last year
to first year franchises um
hitting hitting seven figures
so uh it’s uh not to impress you
but just to impress upon you
that we have a good thing going on here at boar
I love that that is a great way to uh
wrap it up and what a great story
and I love that you’ve gotten five people
just in the last year that’s impressive
yeah it’s fantastic
yeah I agree with you
that gets that gets everybody excited
um
alright so before we wrap this up Kyle
we uh in our podcast
we always like to wrap it up with the final question
uh to our guests
to kind of support those listeners out there
and that question is
what tips would you give to budding entrepreneurs
so one thing the founder of our franchise system
actually taught me this and I’ll never forget it
he told me early on about 10 years ago he said Kyle
we can fix activity but we can never fix inactivity
and so my advice to budding entrepreneurs is
get off your butt and do something about it
and stop analyzing
cause we can fix motion and motion creates motion
that’s what I got for you
well said that’s gonna be a great
additional tip to our library of franchise tips
I like that could you give me a little
give me a little snapshot of that word
those words again because I really like that yeah yeah
do you want me to just say the whole thing again please
yeah so the founder of our franchise system
Nick Anthony Zambon early on in my as a new franchisee
he told me Kyle
you can’t fix inactivity we can’t fix inactivity
but we can fix activity like that
we can’t fix inactivity but we can fix activity
well said yeah
gotta get moving gotta get moving
stay in motion agree
yep Kyle
it has been wonderful to
having you on the Franchise Business
radio show awesome to have you as a guest
ladies thank you so much for having me today
absolutely and um
also want to say to our listeners
if franchise ownership is something you are considering
please contact us at Franchise Intellect
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call with you we also want to give you an ebook
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