Entrepreneurial Itch Meets Support System: One’s Franchise Discovery Process

Free Agent Podcast with Meg Schmitz – Guests: Marissa Kockenover, Director of Development for Sugaring LA, and Fidel, a former IBM executive and current franchise owner with the Sugaring LA brand.

Meg Schmitz:
Hello, everyone, and welcome to, or if you’re familiar with the podcast, welcome back to my podcast. It’s called the free agent. I am Meg Schmitz. The discussion here is all about being a free agent and taking control over your financial future.

The mission of my show is to share inspiring conversations with real people who took the leap into self employment, business ownership, franchising, and freedom from corporate refugees and executives tired of the desk job, to entrepreneurs and investors looking to share camaraderie and inspiration through their own business journey. My podcast aims the spotlight on real people who stepped into the unknown, took control over their destiny and became their own boss. Today I have the pleasure. I haven’t done this for a while and this is really fun for me. I have not only a franchisee, but I also have a representative from the franchise company that was selected.

And we’re gonna talk about in this season, we’re gonna talk more about how do you get started looking at a franchise and what things should you take into consideration? So know that the differentiator this time is that my guest, Fidel has not opened his business yet. He has signed his franchise agreement. And then Marissa is the franchise development representative that we worked with. It’s a three legged stool.

It’s an open dialogue. And we’re just going to jump into the conversation today to talk about how does somebody research a franchise, particularly in an industry that was so foreign to Fidel? It was not where he thought he would end up. But we’ll just jump in here and get started and have the two of you do a little introduction of who you are and how we got started in this conversation. Fidel, why don’t you go ahead and kick it off and give a little history on how you and I started working together.

Fidel:
Yes. Thank you very much for the opportunity. I’m an accountant and I work for corporations all my life. I work lately 28 years at IBM. And after 20 years, they said that it was time for me to retire.

So I was retired last year in July. But I said, well, I’m not at the age that I feel that I need to retire. So I decided to do my own business, my family business. So I started looking for franchise opportunity and I contact Meg. She presented me a few opportunities and I started looking at that one.

And at the end, I decided to select Sugaring LA because there are a few indicators that bought my attention and that’s why I went into the business of investment and I made the decision. 

Meg:
It sounds so straightforward and easy. Did you have any heartache or regret about leaving corporate America, or were you ready to leave when they told you it was time?

Fidel:
Well, it was kind of both. Artificial intelligence started developing a lot of IBM and they said it’s time for you to retire. You take the retirement or you have none a job. Okay, well, that’s. So they, it was kind of that because my department disappeared, so they forced me a little bit to go out and start looking at the market. So here I am.

Meg:
Yeah, the conversation around artificial intelligence and what it’s doing to advance ageism, that’s one problem. It is taking jobs away from people who aren’t ready to retire yet. And so it was quite a transition for you, but you made it very easy to navigate through the process. I remember when we first met, we had not involved your wife or your daughter yet at that, the early stages. How did their voices help you to navigate the types of opportunities that were most interesting to you?

Fidel:
Well, I definitely discussed the opportunities with them, but my wife a little bit shy and my daughter is more spoken. So we discussed opportunities and we found that they’re going to join me on this journey, definitely a business like Sugaring LA, and it would be the option. So nevertheless, they were not on the calls, engaged and everything that we discussed entirely the decision, and it was a three person decision to join because they’re going to be with me on the business, with me and all this journey they’ve been behind, but they’re definitely with me on this. 

Meg:
Yes. Yeah. Well, and then, Marissa, we ask you to jump in here and talk about your role in the franchise development process and what some of your engagement and conversations were with Fidel and his family.

Marissa:
Yeah, absolutely. Thank you for having me as well. Like you mentioned, I’m the director of development for Sugaring LA. So upon your referral, Fidel and I began a discovery process where we went through several phone calls, just getting into the mix, really understanding what sugaring LA is, how it’s set up, how we support our franchisees, how it’s differentiated within the market, and ultimately how the business makes money.

You know, really, really digging in with Fidel so that when he moved into the validation space, he could do that from a place of being educated and could ask some really deeper, hard hitting questions and really get into it with the founder and the various executives within, within the corporation. So he could, he could identify if this is the right fit for him, but simultaneously, if we could identify if Fidel and his family were the right fit for the brand. So going through that mutual evaluation process together was, was awesome. I mean, I got to know Fidel so well.

And then as we moved through together, I got to know his daughter, his wife a little bit. His daughter was supposed to even come to discovery, and she ended up getting sick. So she joined us virtually, but we stayed in the process pretty consistent. Fidel had a really strong cadence. And I think that, that because you build onto your knowledge and because it’s done in a timely manner, everything is front of mind.

So you can really, you can really feel confident and be able to get to a level of confidence to make that decision. Ultimately, 

Meg: 
Yeah. I have to applaud Fidel. The way that you went through the process was very diligent, very responsive. What we know, and this is true of any decision, really, is the easiest, best decision, comes with a routine feeding.

So that, as Marissa was saying, the business scenario, the justification for it, it all makes sense because it is done on a weekly distribution of fact based webinars that then lead into the conversations with the franchise owners. So I applaud you because you were really a classic student of the process and getting through it. You were disciplined, and we would expect nothing less from Fidel because that’s the way that you are. 

Fidel:
Thank you.

Meg:
Yeah. The conversations, Fidel, that you and I had had in the beginning. I’m just going off of memory here. I remember clearly you wanted to look at brands that had history, that had financials that could be verified, and you ended up with a brand that’s really an emerging brand. How did you bridge the gap in confidence? Because as an accountant, you’re used to counting and keeping the pennies together.

But in this case, we didn’t have years or a decade full of franchise disclosure documents where you could look at financials from individual locations. So how did you bridge the gap between your professional training and that hesitation to become an early adopter to you became one.

Fidel:
Yeah. Not gonna lie to you, not having the, the numbers to validate was almost a break from away from this business because I said, wow, I’m gonna be the first one.

I have no gonna have anybody around to support me as a business, not as a franchise. But it was a hard decision. But there were other factors that I considered when I did the decisions, when I made my decision, that helped me to say, okay, this is the right brand. And I can mention the factors that I use. My logic behind the make the decision.

It was clear to me that I did not want anything on the food business or restaurant business because it’s a lot of work in the morning to open a lot of work. At night, when you had to close, you run inventory that if you don’t sell it, it’s going to go to the trash and you need to keep an eye on the margin. Restaurant industry or food industry was my first request to you. I don’t want that one. So I want a business where the other request was not to do a business with a small revenue like ice cream milkshake or something, that you had to sell a lot to deliver the top line.

So that was where my first situations that I took into consideration, then I get to know a little bit about Sugaring LA, says, well, the services of the brazilian is $70 plus you can do another service. So that got my attention and started digging more and more. And then I found that this is eco friendly and is good for the body. And that is a potential revenue in the industry, or this industry at 3.5 billion. I said, well, I can get a little bit of share of that.

And then I did a little bit of research and I found that her core was the first in the beauty, then the nails and the third one was the body hair removal as well. There must be opportunity there. Nevertheless, there’s no numbers that I can validate, but I can validate the numbers from Sugaring LA, in California, from the nail. So that took me an idea. And finally, when I saw that I played with the numbers and a full year operating after, let’s say, months that you opened, you can have a potential of 18 20% revenue.

I says, well, if I can reach these numbers, well, that’s the business I want to get in. And that’s how I made my decision. .

Meg:
Perfect And Marissa, let’s flip over to you on sugaring LA at the stage of development for this brand. When Fidel was first introduced to you, how clearly focus is the CEO and what are some of the differentiators of this brand? Let’s put a little spotlight on sugaring LA and what it is and where you are in your evolution.

Marissa:
Absolutely. Yeah. I mean, when Fidel started, we were really early on. We now have over 32 licenses sold and our first locations will be opening this month. So we have hit that momentum and it’s very exciting around here. But when Fidel started, we really were in those first few licenses. And you know what I think really different.

This brand is highly differentiated and it’s quite layered. And I think what really helped Fidel with the level of confidence, obviously the industry learning the ins and outs, understanding the potential here. But if you take this back a step, this brand is supported by some serious franchise brands, some heavy hitters that have been in this industry for quite some time. The Franworth parent company is comprised of several C suite level former presidents of franchise names that you know and love. Right?

So they’ve got this infrastructure and a franchising playbook that we’re able to leverage that allows the sugaring LA brands. Although it is new to the franchise space, it does allow it to feel as if it’s a hundred plus unit system already, because we’re leveraging all of the human resources, the capital, the infrastructure, the franchise playbook that they’ve already put to work to success with several other brands. So that by itself really helps a franchisee get to that level of comfort. Because here’s the thing. Yes, we do not have open franchise locations for you to validate actual numbers from.

My founder has several locations, four locations that are open in California. So you have those numbers to look at. But to extrapolate to a franchise does take somewhat of a leap of faith. So really what our job is, is to show the franchisee, as we move through the process of discovery together, really to identify and show them what that safety net is built underneath them as they do take that leap of faith with us. So I think that helped Fidel to move forward.

Once you can kind of get to that place and you can, and I don’t know which comes first, the chicken or the egg, but the way the brand is differentiated within the industry, how we service our clients, the level of personalization that sugaring LA offers to its clients, and really being the industry leader, I mean, this is significantly less painful. It is, like I said, it’s a customized offering and it’s much faster. It’s much faster than anything else out there, which really helps to allow it to stand by itself within the, within the marketplace. 

Meg:
And the Franworth backing, that’s John Raucci and actually was in my cabinet behind me. I’ve got his book. I just pulled it out yesterday. 

Marissa: 
Reach.

Meg:

Yeah, Reach. So his history in franchising is so solid. The bumps and bruises that he has taken where he got started as an athlete and how he navigated then into business, it’s a great story. John Raucci and the book, Reach, Franworth, the backing there, the knowledge, the level of experience, but then you’ve also got the REP’M group and a lot of experience there.

Now, has Fidel been connected in that way through to real estate site selection, and talk a bit about the four pillars of support that come to the franchisee? Like Fidel, from the REP’M group.

Marissa:
Absolutely. So this is another level of differentiation. So yes, you’ve got Franworth that supports your franchisees, but Franworth partners with the REP’M group, as you mentioned.

And I am part of the REP’M group. And the REP’M group has four pillars underneath it all uniquely focused on a different aspect of development. So the build team is the team responsible for taking our franchisees from the real estate site selection all the way through construction, so we can get them open on time and within budget. Right. They’re not getting into these businesses to, you know, do deal with construction and deal with that.

We really try and remove that headache off of their plate so they can focus on getting their businesses up and running. And Fidel got connected right away. Within 24 hours of you executing your franchise agreements, you’re onboarded into the system and you are off and running. So Fidel was connected right away with the real estate team and Fidel actually ended up in a very fortunate situation where he was able to find a waxing studio that was needed to get out of its lease. So he’s converting a space, which is quite a unicorn situation.

And I endure to identify that with all of my incoming franchisees. I say, listen, when you validate, you’re going to hear several times that some of my franchisees have gotten very lucky and they’re converting wax Studios. 

Meg:
But that’s a pretty typical model, though, in food, where there’s a franchise concept that has gone out of business and it’s good for you. I remember the story now, Fidel, I wasn’t sure if that lease had actually come through. So that’s phenomenal that you were able to take an existing waxing studio and convert it.

Fidel:
Yes. It’s just going to be cosmetics. Um, we’re going to be up and running, hopefully soon. But, yeah, I was lucky, definitely. Yeah.

Marissa
So it’s an exciting space to be, but I mean, the, building team really walks you through step by step. Right. So everything from, helping to identify the space, negotiating with the landlords, ensuring that the space that you find is, is a true fit for Sugaring LA. Right. And all of those red flags that you don’t necessarily know about.

Right. Is the HVAC back up to date and is there anything, you know, all of those, like, red flags, is there going to be any second egress like things you just don’t notice? The build them team is there for you. Right. Taking you through that step.

And then once we can actually execute a lease, then they’re moving into bidding out for contractors, pulling your permits, procuring supplies, and they meet with you on a weekly basis. Right. You’ve got your, and you get a login to their platform so you can watch everything that’s going on and have that level of insight, but it’s quite a handhold that takes you through each step. So while this is all happening, so there’s a timeline that the franchisees all focus on.

So I’m not exactly sure where Fidel is in his timeline, but so that as the build them team hits each kind of developmental milestone within the build, it triggers steps for the operational team and the franchisee to begin executing. So I’m not exactly sure where Fidel is in his timeline at the moment because he’s actually, you know, that he’s so fortunate that he really is just kind of doing some cosmetics to the space. So.

Meg: 
So in other words, shortening up the timeline to get open, the construction, the regular vanilla shell into the finished product has really been minimized. Fidel, where are you in the process then with operations and marketing and additional training for either yourself or employees?

Have you started to hire? I know that was a lot built into that question there, but where are you?

Fidel:
And no, I’m not there yet. The reason behind the delay is because the contract between the landlord and my lawyer and the lawyer or the seller, the transfer was a little bit painful, longer than we expected. I was expecting to sign like a month ago.

And finally it looked like we are signing today. Yesterday we signed a couple of documents. So the signature of the transfer of the lease is going to be today.

Meg:
Oh, congratulations.

Fidel:
Thank you. And then on, on Monday, my wife, my daughter and me, we are traveling to Ann Harbor, to the facilities of Frank war for the training. So we’re going to be there three days on training. And as soon as we are back heading to the city to get the permits for the cosmetic changes and the permits for the salon and. But in the meantime we have made progress. I already work with the architect on the layout that it changes.

So it’s done. So I have it ready just for that one. I have ready as well the window clinch for the putting up Sugaring LA is coming. I made progress with the marketing team on defining the DBA for the play.

But everything is on hold until I have the contract in my hands, which I hope is going to be the end of the day today, finally. And after that, after coming back from the dream, I will need to start looking for the employees while the cosmetic changes are happening, which I expect to be somewhere in the neighborhood of three, four weeks. I need to buy some millwork and a couple of things here and there. I don’t know how much is the waiting time, but it’s already moving.

So nevertheless, I don’t have the contract. I know that it’s coming. It’s coming. Everything is on hold until finally the document is here.

But my guess is that I’m going to be hiring employees sometime mid November. And then probably sometime on December, I will do the soft opening where we’ll do some free services for our sugar is to get certified, and then sometime in January would be open for business.

Meg:
Well, how fortuitous that we got you today for this interview. And what I really appreciate on behalf of the listener as you’re talking about it, is that you know what’s coming next. The franchise REP’M group, Franworth, have laid out a process so that you know what the tipping points are that trigger the next steps. It’s the beautiful thing about, yeah. Not every franchise is created equal, by the way, listener, not every franchise has this level of support and this clarity in the timeline going forward.

So, Marissa, I imagine that’s one of the reasons why you’re aligned with this brand right now.

Marissa:
Yeah, I mean, I. I’m actually a former franchisee myself, and I’ve been through this process and I know the different ways that it can look. So I’ve been in this franchising world for quite some time. And that was one of the decisions that really led me to joining the REP’M team and representing sugaring LA.

The level of integrity all the way from the founder. I mean, she’s got some serious grit and she is just incredibly authentic. And, you know, it starts at the top and it really just drips into everything we do. And so I, you know, when you wake up in the morning and you can just feel proud and just feel confident and just really inspired by what you’re doing and know that every move you make is done with a level of integrity, was a brand that I felt, I super confident I could, I could get behind. So that is.

And I, you know, every time you and I have had this conversation before at our conferences, it feels good to walk into a room and be able to hold your head high and know with utmost confidence that you are delivering an opportunity to really change someone’s life. It feels great. And I, I love being a part of the team and I truly love the brand. And I’m really excited at the opportunity to really revolutionize the space and become an industry leader. That is Danielle, our founder’s goal.

It is her ultimate vision. She wants to be the whole foods of hair removal. And with each additional license and each new franchisee that comes on, I think we’re starting to see the possibilities more and more. And Fidel, you know, correct me if I’m wrong, but so I have the privilege of leading a franchisee validation call every other week. We do them twice a month.

And Fidel has been really diligent about being on those calls. He’s been an incredible leader for a lot of them. So thank you for that, Fidel. But what I find so remarkable about this brand and I franchisees, is the culture, the culture that we have created. It’s like they all get on the call together to update each other.

They’re excited to be able to kind of greet a new candidate and a new potential colleague. They’re all excited to kind of see who’s coming on board and have the opportunity to contribute to the process or assist in the process. But I think they also all get on because they like each other and they want to know where they’re at. And I know Fidel’s made some friendships along the way with Erica, who he was at Discovery day with. And I don’t know Fidel.

Do you want to speak to any of that? But that, to me, has really been such a shining star in this whole thing.

Fidel:
Yeah, no, that’s correct. And we’ve been in touch with Erica, with Sam, with Ozzie. So, yeah, never.

We are not really in calls and everything. Whenever we see there’s good communication or if there’s something, just a quick text message, where are you in the process? So there’s good communication with them. Definitely. 

Meg:
And that’s one of the tenets of franchising. You’re in business for yourself, but not by yourself. And I get comments or questions periodically, but am I just buying a job and will I really be able to put my own stamp to create my own culture underneath a brand that’s already established? You’re not there yet, but with all of your corporate experience, I imagine as you’re hiring, you will create your own culture and your own communication within your employee population and creating that teamwork, the customer service. Oh, my gosh. The other thing that I have to talk about are the products that you use for the consumer, for your client to take home.

Marissa sent me a box of the Sugaring LA products. Not the sugaring. It’s not the sugar itself, the hair removal, but all of the care products that I use them, Marissa, I use them every day.

Marissa:

Do you? Oh, I love that.

Meg:
And you know, in my role as a franchise consultant, I get boxes of things to try, whether it’s eco mades and it’s a cleaning product that’s green. I get samples of this, that and the other thing. So Sugaring LA is one of the product lines that I continue to use every day. I love it.

Marissa:
Well, there’s more where that came from. You just let me know, I’ll have it sent your way.

Meg:
It’s a great testimony not only for Marissa that you have been a franchisee. I’ve been a franchisee. People look to us and wonder, well, why are you aligned with this brand right now? For me?

Why would I give to Fidel a brand that is so new and clearly went against what Fidel, you and I had talked about. You wanted the history, you wanted the proof. Why would I give you a brand like that? It really is a testimony to the founder. And having met her at a couple of events now, I see a lot of CEO’s, I see a lot of founders.

They come, they go, some of them are cut out for franchising. They have a great brainchild, and it’s a brand that really has legs, but they’re not the right leader to take that brand to the next level. You’ve really got such a nice group of Franworth REP’M, the leadership at Sugaring LA, the disruption in the industry. It’s a great package to take a look at right now. So for anyone who’s listening, if you’d like to get more information, whether that’s from me about Sugaring LA, please reach out to me.

We will. Then at some point, if that’s a direction you want to go in, involve Marissa, who then would handle the franchise development aspect. And then somewhere down the line, you might have the opportunity to spend some time with Fidel in order to ask him about his experience and about the process that has now been laid out and made clear. I like people to find out. Okay, it’s a clear process.

But were there any disconnects, were there any points? It’s like a, you pay the franchise fee, the curtain goes up and the show goes on. So I say you’re going to have surprises somewhere in there. Are they surprise and delight? Are they surprise and disappoint?

And everyone should be prepared for both because they’re going to be, this is an emerging brand. There are going to be things that seem to be very clear and predictable but like Fidel lives in Florida, just had a series of hurricanes and horrible weather come through. They’re going to be disruptions but it’s that dynamic between you and the franchisor that will really determine your future success. So I want to thank both of you for taking the time this morning to come on and share your experience. Fidel, I’d love to circle back around to you maybe in a year and have you come back on and talk about your first year with Sugaring LA.

I wish you had nothing but the best. And this afternoon please send me a text when you’re official.

Fidel:
Thank you.  Yeah, I will. 

Meg: 
Sharing your success, sharing your joy with that.

And so both of you, I just so appreciate your time this morning representing sugaring LA and making a great set of interview questions really easy for my audience to listen to and process. So thank you both for your time this morning.

Fidel:
Thank you.

Marissa
Thank you.