How to Build a Franchise Empire Without Starting From Scratch

They are wrong.

“My guest today took a 36-year-old power-washing company in Northern Pennsylvania.”

Franchized it from scratch and scaled it to 352 locations across 37 states.

He did not wait for permission. He did not start from zero. He acquired the proven machine, systemized it, and let other operators plug in and run. Aaron Harper figured out something most founders miss.

The fastest path to scale is not building something new. It is replicating something that already works. Today we are talking about franchise through acquisition. How to de-risk a business without killing the upside and what it actually takes to execute when no one is watching.

If you have ever thought about owning a business, building a business, or scaling without burning your life down, this episode is for you. Let's unlock it. So Aaron, just before the show you were discussed in about essentially how you become this master in franchises and building a franchise and being able to sell them through brokers.

Before we really get into it, tell us a little bit of who's Aaron Harper. Where do you come from and how do you even land in this place you are today? Well, thanks for having me on. I'm excited to be here and talking with you today. Yeah, I'm from Southern California.

I didn't grow up wanting to be in the franchise industry. In fact, I didn't even know what that meant. I actually wanted to be like a Hollywood agent. So I went to Hollywood and after college, I literally worked in like at the agencies. And thought I wanted to like be Array Gold if you've watched on to Raj.

Yeah. On my favorite shows, I love it. It's a good show. It's so good. Yeah, so I thought I wanted to be Array Gold.

And then I was like, wait, this is like a miserable existence. And I don't enjoy this at all. So yeah, I had a friend that worked in franchise development.

“And he goes, you should get into franchise development.”

And I was like, what's that? I think like many people who hear the word franchise, they think McDonald's, Wendy's, Chick-fil-A. And I was like, dude, I don't really want to like build fast food joints. And he's like, no, like, that's not what I do at all.

And I was like, well, what is it? And he goes, well, you know, 1,800 got junk as a franchise. And two men in a truck is a franchise. And Mr. Reuter is a franchise. And Chem Drive is a franchise.

And I was like, oh, and then I didn't know that like franchisees were independent business owners. Like, I had no idea. And I didn't know that they owned 100% of their locations that they bought. Like, so like, I didn't know McDonald's wasn't like corporate.

It's like an actual person. Yeah. It's like, I had no clue. Yeah.

“And I think I'm like a pretty generally smart person”

and like had no clue, literally no clue. But the idea of helping people become business owners was like, oh, I can march behind that forever. Like, that's a great thing. And so I emailed his boss every three weeks until he hired me,

basically. And then ended up working at a carpet cleaning franchise. And I grew that by about 200 locations in three years. And then I got on a drywall repair franchise as an employee. I grew that from 98 locations to 323 locations

and about 23 months. And then I was like, wait, I can do this on my own.

Turned down a million dollar offer to keep doing what I was doing.

And raised capital and looked at a bunch of different businesses to franchise across the country. And I found 30, now 36-year-old power-washing company called Rolling Suns, based in northern Pennsylvania. Great family business, good bones.

New I could replicate it anywhere. Acquired the brand, invested my own money. And I'm the majority shareholder in Rolling Suns franchise. That was not a franchise. So I created an entirely new company and franchiseed a business

that's been around for 36 years. And we've since grown from a single location power-washing business in northern Pennsylvania. To, by the end of this week, we'll have 352 units operating in 37 states across the country.

Wow. So many questions.

And I first of all was, I mean, congratulations on all of that success.

As much as I want to go back to the first part, the already gold part and out of my own wonder, what was, why did you hate it so much? Or what was it? You know, obviously, glorified, you know, already gold.

But like, what was it really back then? You just were performing. It just, like, so Los Angeles is, it's a very, the, the Hollywood industry is about,

Like, it's just very vapid and, like,

“it's also hard to, like, measure in terms of, like,”

your, your, like, what parties can you get into? Who can you get on the phone? Who can you sit down with for lunch? And everyone's trying to, like, get up one on each other. So there's a lot of, like, thickness and,

and, and I loved the, like, systems in Hollywood, which is, like, this is how we build great, great movies and great TV shows. But the way it kind of, like, operated really just going to give me joy. And I was looking at my boss and I was like,

I don't want anything that you have. Like, yeah. I don't, like, wow. Well, that's a good idea. Yeah.

Yeah. Yeah. That's interesting. So you got into the franchise world. And it's funny, you know, you, you, you just naturally think you said,

you know, when people think franchise, you definitely McDonald's working, right, every fast food. But there are so many different franchises out there. What was interesting that you said is, you don't need to start a franchise from scratch.

You can take a good, what I kind of heard was a mom and pop shop that has a structure. Yep. And then look at it as a franchise. Like, let's just discuss that.

If someone was sitting there thinking, "Oh, shit. How do I, a franchise, my own thing, or how do I get into this world?" Like, what would we say to them and how can we support them? Yeah.

So like, there are basically two businesses every time you franchise a company.

There is the core business. And then there's the franchise business. And running two businesses at the same time is very difficult.

“So I think the best thing to do is to have someone who owns and runs the franchise business.”

And someone who owns and runs successfully the original location or locations. I think where a lot of people get in trouble is they're like, "I'm going to try this franchiseing thing on the side while I continue to run my power washing business." And we'll see if the franchiseing thing picks up and makes sense.

And then they're like doing a startup while still running their normal business. And then they're convincing other people to come in and start startups, underneath their part-time startup. And it's like, it's just doesn't, it's not going to work like frankly. And so what I knew that going into it because my background is in the franchise industry.

So I was like, "Hey, I'll find a great business. They can keep running and owning and operating their business." This new business, which is the franchise business, will acquire the system's processes, trademarks, franchise rates, everything that has or will be created from a system's perspective by that business.

And then we'll franchise it. And so I call it franchise through acquisition, just like you've heard on your ship through acquisition. Like it's like keep your great business. I actually love it so much. I want you to keep running it. I love it so much. I'm going to replicate it hundreds of times across the industry.

And get other people who are going to open those locations to believe in your business as much as I do. And it's really the same thing that Ray cropped in. Yeah, absolutely. Which is a great movie. That was a great founder, such a great movie.

How are those deals? I'm just interested in how those deals structured usually then. Because if you're going to go to the mom-um-pah, I have the car-washing business or whatever.

“The car-washing business here in my hometown, right?”

And I just have a system. It's good. I figured out the marketing. I figured out how to hire the right people, how to train them, how to get people bought in. And all of the things of a good business has. You come along and say, hey, I don't want to mess with this business.

This is your baby. You've done the hard work. You don't want to replicate your business. I'm going to go do that. So I need to learn everything, obviously, and digest how you've done this. But then I'm going to go replicate.

Like, I love we said, go to other people who are just invested as I am in this and believe in this and sell themselves. That becomes the franchise. It becomes the franchise. How are those deal structured?

Like, am I now a partner with you, 50, 50? Am I only getting a little bit 10 percent? How's that work? You're getting a minority share in the company. Because it's a company that really, you didn't have before.

And now it's like, you've got your great company that you build. And I'm going to go and put everything on the line to build this company. I'm going to put all my money in. I'm going to raise up. All the capital.

I'm going to take all the risk. I'm going to run the whole thing. And I'm going to give you a piece of that company. And so yeah, that person is doing is basically just saying,

Oh, yeah, I'm never going to franchise my business.

Like, I don't know how to do that. It's going to cost millions and millions of dollars. Literally, millions of dollars to franchise the business. And like, why don't I just keep running my great business?

And they'd be like, well, I'm going to franchise it. I'm going to be like, great. Like, you have no use for me. Like, I'm literally the franchise. I'm going to franchise a business in this space.

And the problem is that it's a completely new business that they don't know how to start.

Like, it's very, it's a very difficult business, franchising in general. But there's an art to it. There's an art science. There's like politics. There's like legal. There's so many, like, regulations around it.

Like, it's just that it's a very difficult business.

“And it really, you need to get a hundred open units for the model that really even fundamentally makes sense.”

And only about a hundred units, just like a hundred different, like, let's say, locations or businesses for it to actually become a successful franchise. A hundred and sixteen percent of all franchises get to a hundred units.

Wow. So it's like, it's a very slim chance it's going to work out for your average person who's never done this before.

And the way to make it work is to have someone who's fully invested in a majority owner, putting everything on the line to make the brand work. And then someone who's fully invested in their location, making sure that that becomes the replicable model for all the franchisees that are buying in. And unfortunately, that structure doesn't happen all the time when it comes to franchising,

because it's a guy who has a great milkshake business who's like, I'm going to franchise my milkshake business. And he's good at making milkshakes. He's not good at building a franchise order, right?

And so anyways, that's the way we've done it.

And the original founders of rolling sets are involved helping franchisees grow their businesses. They still own a hundred percent of their business. They've launched a truck manufacturing business that sells into the franchisees. So they've achieved additional upside above and beyond what they went to. And this will be a, it has been a tremendously life-changing experience for them.

Oh, I can only imagine. I mean, they're sitting there. I don't, you know, they're just sitting there and they're a little hometown thinking they got a little business. And then, up comes Aaron himself, the Mr. franchisee over here and changes their life. I think it's fantastic and I absolutely love it.

You've, you've mentioned you've done it now three times successfully.

“How many did you have to fail to get to the three big ones?”

You know, I was fortunate that I got to watch the company I was working for. Make a bunch of mistakes and learn from those mistakes as an employee. Before ever launching my own thing. So in those other two brands that I mentioned, I was a very well paid employee that kind of helped one kind of individual department grow. Observed all of the other departments and how they either worked together well or didn't work together well.

And in my mind, I archetyped what a good franchise brand looks like if I'm the one making all the decisions. And so the only really bet that I've made in terms of going out of my own and becoming an entrepreneur is on rolling sets. And we have had a good amount of success. And I'm pretty damn well here about an entrepreneur and what it sounds like I know when I know when to get out of the way and I know when to put people in place and we have a great CEO that runs the company. And I sit on the board and we've just scaled rapidly and I think we've done it to the best viability the right way.

Yeah, it sounds like that. So I would just say if someone's thinking about there's like hi, is there tell tales of like how you pick your winners or losers or is it, is there not I'm sure there must be an art to that as well. So a franchise brand is dependent upon the franchise ease that come into the brand. The people who are buying the locations. And they're willingness to execute on the model and and be team players and go out and grow their local businesses right like I don't have a business unless we have franchises in their markets growing their locations and pain royalties.

“And that's how the model works right like you have to and so what we're obsessed with is how do we increase the cash on cash return.”

For the franchise ease that come in and open this business for 350 or 400 thousand dollars to get started right so how do we help them get to a point where their investment makes sense faster.

And and so you you basically you create systems you tweet the systems you better the systems and then that time and time just continues to get more and more compressed.

When you launch a brand and you have your first ever franchise training. You have no clue how long it's going to take you have ideas but like up to the franchise ease to actually like truly and so now we have 136 trucks on the road in 37 states owned by franchisees that have two three in some cases four five or six trucks. And and they have scaled their businesses and we've continued to invest pretty much every single dollar that we've gotten back into increasing systems to continue to lead condensed that time frame such that.

The franchise is now that launch and they have contracts booked before they go to training like literally wow we got them contracts all they had to do was buy into the brand. And it's interesting because we've invested significantly into resources for national accounts to to generate business for franchisees before they even open.

“So one of the things you said I thought was very important it makes sense is the people who are purchasing the franchise.”

They have to be the right people because they can purchase the franchise but if not going to the work it can actually wreck also the brand and what happens up upstream. How do you find the right people how do you know the right people how where are these people. So this is probably the hardest thing for most franchiseeers who don't have experience in franchise sales to do they don't know who to identify where to find them how much they need to pay to acquire them like it's a whole business literally.

And my experience in franchise development which is franchise sales that was what I did like I those 300 I guess it would be. 450 units that I sold before I launched rolling sugs for two different brands I did every single I awarded every single one of those units myself so every franchisee that bought that those territories I talked to them from the time that they were introduced to the time that they closed the deal before they go to the operations team.

“So that's literally my background in franchise and that's how I got started that's what I know.”

So we are fortunate to work with some incredible franchise brokers in the space.

And so for those who don't know a franchise broker is like a real estate agent for franchise so you go to them you say hey my investment levels 250 thousand dollars. I industry agnostic but I like senior care at home services and then the franchise broker then knows brands and presents them three options and then the franchise broker is compensated when the deal closest we pay them a portion of the the fee that we're paid by the franchisee. And so when I had done two brands prior to this one the franchise brokers that I know and that they trust me they're like you're not.

I'll sell whatever you want me to sell like I know that you're going to a close deals and be support franchisees in a way that makes me look great. And so whatever you're attached to I'm in and so part of the reason I decided to leave the company I was working at even though I was literally going to make seven figures by saying that that company annually. Because I didn't have any upside in that business that I was going to grow for them and the I was de-rest because the franchise brokers that I'm close with would go with me to any brand because they've known me before I had kids like we've known each other for years.

And so if and when we ever do rolling sets version two but a different industry. I can go to that same I mean these are hundreds of brokers across the industry and they'll say Aaron I trust you what's what's rock and we can get a hundred two hundred units. On the road and open relatively quickly comparatively to someone who didn't have any experience in franchising or franchises.

“So I'm I'm hearing a couple things I think it's very important for people to go well what's it in for me.”

Well first and foremost you have some relationship equity it seems like with the right people to get out.

Yeah, how. Really speed up the time of getting the right people in the door to buy the franchises and then those right people are the ones that are going to implement the franchise fast so as long as they have the system.

And we're here you might as well let's talk about your car wash it's sort of the wash power washing business because it he said some interesting things that I thought was wow that's pretty powerful.

“If I'm sitting here and I mean I hate to be the guy that's gloom doom and gloom but like.”

There's a lot of people in America right now and you know that don't have jobs that are looking or looking for ways out trying to figure out a great additional income trying to figure out how to create maybe some legacy for them. It's from sounds of what I'm hearing you say like franchise E is probably is one is a great way for doing that while they're your. You have a strong business yourself and you don't have that family member you want to sell it to or the son that you or that your kids don't want to take it over.

There's an opportunity here where maybe you can franchise that obviously depending on the business and what that is.

But there's another huge opportunity specifically with you where it's where you said people were already getting their first contracts before they even had the business set up.

Like I'm assuming it's because you guys figured out a very unique way of creating demand for such thing online that allows people to raise their hands say I'm interested. That correct and that's just what we're talking about basically yeah so I'll address kind of both things that you said so franchisee whether you're a franchise or franchisee meaning I'm a franchise or in the people that buy into the franchise system are franchisees. So whether you go and franchise a business or become a franchisee of a business it's one of the best ways to create wealth.

“I think that is underserved and under and unknown by most people because you could take 200 grand and put it in the S&P 500 and it will grow annually at a certain percentage.”

But if you put 200 grand into a business that you own and operate every day. You could have a 20 to 100x return on that over a period of time growing a company and where most business owners don't have most people who start businesses they don't have some great idea like there's like. You don't need to have like be mark Zuckerberg Elon Musk like that's like the point zero zero zero zero zero zero zero one percent like you just need to do something ordinary but do it exceptionally well. And so that's essentially what we've done like power washing is not rocket science.

But we predominantly focus on commercial power washing so we're doing stadiums and airports and gas stations and convenience stores and bigger jobs hospitals so stuff like that. And no one really is doing that work currently it's largely the guy who's a high school student he's got a thousand dollar machine does this on the weekends and in the summers and he makes 30 grand and it's great. But we're like coming at it from the perspective of no we're going to build a multi truck commercial pressure washing empire in every single market that we we go into.

And so you know you can you can really build a great business by just doing something that is very ordinary and average meaning the service but actually just doing it better than the other people who are currently doing it. And and that's essentially what we're doing and we're giving franchises the ability to follow a system that allows them to do that. And then on the like how are we generating demand level well now we have 130 plus trucks on the road. So we can go to companies like Costco and Walmart and Chick-fil-A and be like hey we have 37 states that we have presence in why don't we come do I don't know let us do 300 a year stores and then we go do 300 of their stores and they're like oh you actually did a great job and I like having one point of contact.

We don't ever want to use a local guy again so here's 4000 of them and so we can basically go and have this leverage now because we're the only coast to coast power washing company out there because we have so many franchises you bought into the brand and are out there grinding every single day. And so we have this leverage that we're able to do that no independent business owner is ever going to be able to have by just opening their own power washing company. Yeah, it sounds I mean I totally understand just the power of brand right alone in itself so as you just sitting there I'm thinking okay.

“Where do the people fail like I've of all your stores you have I believe you said like you're in the 300s now which is incredible over the last couple years what was the success rate of these.”

Yeah, so this is where people go wrong. Okay, they buy into a franchise and they think they don't have to do anything.

If I could support fully multi million dollar locations with just our infrastructure alone.

We keep the entire economic upside instead of getting a royalty there'd be zero reason to franchise your business.

“We're franchising in the franchise ease that make the biggest difference and make the most amount of money.”

They understand that it is a hundred percent their business. It lives and dies with their ability to hire, retain, recruit, sell and build a company. I can't do it for him my team can't do it for him I have wonderful executives that have been doing this way longer than I have.

We can't do it for him again if they could we wouldn't franchise our business there'd be no reason to.

And so where you see people get in trouble when they buy into brands is they're like they come in with kind of this employee mindset because a lot of people.

“Work leading corporate America where they have employee handbooks and they make 300 grand and they expect the departments of the company they work for to give them all the things that they need to do their job well.”

When you're a business owner you have tools but it is your job to make everyone around you do their job well. And so going from an employee mindset to a business owner mindset is where people struggle if they can't shift from employee mindset to business owner mindset they're going to end up not it's not going to work. I mean how do what business they go into it just won't work. But you say you can't help them but I'm assuming you have training and manuals and proceeds. Yeah and just to be clear like when I say I can't I just can't grow their business for them like.

I can give them training we have a call center we have marketing companies that generate leads we have national accounts where we're helping them get more work like we teach them how to hire people. But they actually have to wake up every single and do it.

Yeah I always say I always say this when I'm hiring when I'm going to come in on to a consulting gig or hiring salespeople who want me to teach them how to train I say listen.

I can meet you I can show up and do my 100% of my 50% but what I can't do and I won't do is I'm not going to wake you up at six noon morning knock you on the head and say come on let's get going. We got to keep doing this you got to show up at 50 I'll show up at my 50 and it works so it's the same thing they have to actually do the hard work. Yeah but from with that said like the majority of our franchisees come in with the right mindset because we set the rate expectations in the franchise sales process.

We tell them this is what it's going to take this is when it's going to be really hard. You're going to want to quit but if you push through that get to the other side pass a year or two years you're going to have an asset that you can transact and pass down to your kid and like. You're actually going to have recurring revenue on the books like this is like the reality of this business and we have hundreds of locations that are out there doing that right now. Are you willing to follow the system are you willing to get in an execute and so largely our success rate is considerably higher than someone just going and starting their own business on their own to try to figure it out.

They have to go out and figure out what website provider to hire and what logo they're going to create and what's their mission statement and how are they going to hire people and which marketing vendors actually work versus don't work and how do I get materials and tools like all that stuff doesn't exist and business owners are going to spend. Lots of time creating all that and guess what it might not work. Yeah, I mean, you're buying it across thirty seven fifty states like it's working so it's it's a dearest opportunity.

So I asked a question I'm not sure if you know that answer though what is your success rate do you guys know your success rate of franchises opening so we've had so we have ninety seven owners. That own three hundred and fifty territories okay yeah multi seven actual people that made the decision to become rolling suns franchises out of the ninety seven we have had eight only eight in three years either transfer. And we've had one close so transfer means like they got out and they sold to their neighbor.

Close means like they just were like I don't want to do this anymore. Yeah, which is like to be honest with you a great number.

“I wish it's a fantastic number because you know what what what happened that one person I think we all know what happened that one.”

We don't need to go into that explanation and if you're thinking about that one person then like it goes back to that employee business mindset like it's probably not for you.

I truly believe I mean I've heard of the models and I've seen these models but I don't think about them all the time and just even even speak with you and hearing with you is like if you're willing to take the risk of starting your own business with a no really good idea and hoping that's a good idea and having to go through all the pain.

“Or you just really want your own business and have the upside and potential support then really realistically you know a franchise model is probably a better choice for that person.”

Well and if you look at like what's happening with AI right now it's actually.

It's actually probably one of the most scary times for your white color professional to remain in a job like couldn't agree more. Yeah, it's like I'm doing work in AI on building building something for the company and it is doing work for me that a $200,000 a year employee would do. And and so you know people are like oh I don't want to buy myself a job at the reality is is every single business that you start at the beginning becomes drop like you trade your time for money regardless. And eventually you hire great people and they replace you. Well I got out to disagree with one thing it doesn't become.

Your job it becomes multiple jobs multiple hats and you keep yourself you actually work way harder and longer and stress and read your sleep and pull your hair out way more than you ever as an employee.

“For all for what the upside I'll never forget when I first got even in the sales which was you know commission job only kind of an intrapreneurship right.”

My I'll never forget the quote that he that my mentor the time said he's like what are you willing to do in the next three to five years that most people won't.

In order to live a life most people will never live what are you willing to do and I expect like I told to get it like are you willing to go sleep this night are you willing to put the 350 500 thousand dollar risk out there. Are you willing to hear the nose so that you can live the life everybody else wants to live now with this franchise model it seems like there's so many things that are derisct and proven that really and I'm going to assume this because we're right in here. I'm going to assume you're also going to help them find the location or or help them understand this is probably not the right market for this or whatever it might be so that people are not making.

“You know opening up a shop in a small town that probably can't serve as a long time you know power washing company.”

Yeah, I mean we are helping them with like what I have thought through as many of the variables as you could possibly think through so that I can take off these variables off of their place so they can just go focus on execution like they don't have to answer their own phones we have a call center that does that. There's an outbound call center that goes in generates leads for them that's calling homeowners and generating leads there's outbound emailing this generating leads for them through vendors that are generating organic leads there's an accounting company that does their books there is a payroll company that does their payroll like all of these are either done internally by us or are done by vendors that we've negotiated relationships with.

And so the franchisee in the right franchise model gets to get in say okay I've got the playbook now I just need to go out selling generate revenue and higher great people yes that's exactly what you need to do in fact all you should be doing every single day is focusing on those two things. Where franchises get in trouble is there likes behind an analyzing numbers at two o'clock arm at Tuesday and it's like no no number revenue generation and higher and great people and scaling your business is what you do during business hours.

I joke but like dude I literally when I slant just company I awarded the first 160 units myself.

I would wake up at five a.m. run the business till seven thirty get on the phones from eight to six put the kids to bed from six to eight get back in front of the computer from eight to eleven thirty running the business and then I'd start over again. And so every thirteen days we are hiring a new person for the first fourteen months of the business and like that's what it takes like you have to do that regardless of whether it's franchise or not franchise because that's what it takes to build a great business.

And the franchise is you come in and do that and understand that even though we have all these tools they still got to go in and execute those are the ones that are most successful. And it sounds like I couldn't if I was picking this up you're saying they have to dry generate revenue and it sounds like you have systems where the revenue is being like the leads are being generated like generated. They just got to answer the phone from the call center and flap their gums which is following a script which I'm sure you give that and just all of the script get the deal done and then go execute the work.

If no one really picked up someone's listening here and they're wondering I don't know I'm selling this for you because I'm sold I'm going to be calling you me like buy me five five them please.

“If you if you looked at if you listen to what you said it was very interesting to me we have over I'm going to say 300 plus locations but only ninety seven owners.”

What does that tell you that means that the owners themselves have multiple locations because they see that they see and believe in this.

And I understand that the power of like the power of two is greater than one the power of three is greater than two.

So it's it's obviously it's a working model. It sounds like you guys have a dialed in and I'm just going to leave it here because I think it's fantastic. I think if you're even thinking about creating a business if you're even thinking about even trying to find actually park some money.

“I'm looking for extra ways what we people call is the mailbox money eventually it seems like this could turn into mailbox money eventually.”

I mean, I mean if you put the hard work in the first year to set it up then it sounds like you can hire a bunch of high school kids to run the business for you.

And you just at that point the systems are in place the marketing and plays the repetitions in place you're facilitating your mailbox money pretty easy.

“Or interested want to learn more work and they find you.”

In rolling sets we've got plenty of territory left we're about 30% of where we want to be system like nationwide in terms of presence. So you can go to rolling sets franchise.com and submit. Learn more and you'll be on the phone with my team within a couple of days. I also put out a lot of stuff online just about franchising in general. And you'll come up with a bunch of Twitter and LinkedIn different things where I've put out content over the years on just what it takes to be a great franchisee and be a great franchisee.

Or that is hopefully helpful to those who follow along. And I appreciate you being here stopping by and I'm hoping that we somebody's understood what the vault on locks all about and for them unlocked a power of franchise and the power of business. So thank you so much. Thanks, Kira.