“Ask yourself whether the dream of heaven and greatness should be left waiting for us in our graves–or whether it should be ours here and now and on this earth.” - Ayn Rand, Atlas Shrugged

We are going to take a look at why you must be objective through out the franchise research process. From the start when you are surmising your own strengths to the very end when you find a red flag in the nth hour of discovery.

1. Why You Need to Focus on Objectivity

Starting a business can be, and mostly likely will be, the best or worst decision of your life. I know this to be a fact, I have had two businesses and one of them was the worst decision of my life and one was the best (outside of marrying my wife).

Why is this? To make this business successful, you need to invest a large amount of capital, time, and energy into this business. If you over-estimate your abilities, if you rely on your gut and not demographic data to pick a territory, or if you ignore a red-flag at the end of discovery because you have allowed yourself to fall in love with the concept, you could end up with a franchise that is a poor match for you, a franchise that is a poor match for you area, or just a bad franchise in general.

Imagine waking up everyday being bad at the thing that is supposed to make you a multi-millionaire. Or you doing twice the work of another franchisee who is in a better territory than you, and getting half the results. Or, perhaps worst of all, you are doing everything right, it's a perfect match for you, but you still can't make any money because the franchise has flaws you ignored. Now you have something you can't sell, can't make money with, and can't easily quit because of the contract you signed.

2. Atlas Should Have Shrugged

Imagine you are Atlas, the Titan orders to carry the world on his shoulders. The world's population doesn't care and probably don't even know you are there, toiling, struggling, suffering. And it's all for them. But here's the thing, you probably don't have to imagine. You are holding responsibilities, expectations, and fears on your shoulders that are causing you to suffer.

It is time to shrug the world off and start living for yourself!

If you are going to own a business, you are going to own it. Not your friends, not your former co-workers, not your parents, not anyone but you. This is for you. Your future customers don't care if you start the business or someone else does. You are beholden to no one.

If Carl Jung was right, and life is a battlefield, you need to clean the detritus in your mind from the battles long fought. You need to be totally free to admit your strengths, your weaknesses, your goals, who you want your customers to be, how much you want to make, and every other critical aspect to finding a franchise that is a good fit.

You need to shrug.

3. What stages in the process is objectivity most important?

1. Initial self-assessment: What are you good at and what do you want out of this franchise?

   • To find a franchise that is a good fit, you have to know your strengths. Put all pride aside and list our strengths and weaknesses. Since this is difficult for anyone, ask former coworkers, bosses, and customers.

   • The other aspect of fit is lifestyle and earnings. These two things usually go hand in hand because there is no business that is easy, doesn't take a ton of time, and makes millions. If there was, I wouldn't be doing this.

   • Ask yourself: Are you buying this business to replace some target income and control your life? Is this a side hustle that is meant to be fun and flexible? Is this a vehicle to build generational wealth? Is this a side hustle that lets you keep your job but can scale over the next 3 years to eventually replace your job? All are different goals that require different franchises.

2. Industry Selection: What industries meet the strict requirements that make them a "good industry"? It doesn't matter how much you may love playing your Ukulele, if it's a dying market you should do it on your days off. Unless you enjoy throwing money in a ukulele shaped pit, find a new industry.

3. Franchise Discovery: Don't fall in love with a franchise. You need an objective franchise scorecard to go through as you do your research. This scorecard will tell you whether this is a franchise that can help you hit your goals.

   1. The problem is, you may find a red flag that is supposed to kill the deal but you have been researching the franchise for 3 months. You really like the sales guy and the founder. You have spoken to franchisees doing well. You don't want to start over. You have fallen in love.

4. Your territory is the last piece of the puzzle. You need to do research outside of what the franchise tells you unless they have extremely sophisticated software and data analytics which is rare.

   1. You have to ask franchisees what are the key KPIs to look for in a territory and do the research into where you live to validate those KPIs exist. A 300,000 population is meaningless unless you know the demographics of that population and what they should look like to make your franchise successful.

   2. You also need to know the competitive landscape through mystery shopping competitors and talking to potential customers.

   3. If you are bad at research, pay an outside firm to do a feasibility study.

Side note: I have a very clear research process with a note taking tool to keep the information from becoming overwhelming. This helps you keep track of everything and make objective decisions, based on the research you have done, and not on gut feelings.

4. Write It Down

Humans are emotional animals, there is no getting around it. That means we need systems to help us make good decisions when our emotions are high. Luckily, making a system is easy for franchise research. Just write it down. Write down you goals, aspirations, and red flags. Write down what has to be in a franchise for you to start it. Write down what will be an acceptable territory before you do your research. Then once you have done your research, check if it meets your criteria. If not, its a no. If it does, move forward.

• If you don't do this, you will convince yourself that the answer you found is good enough because you have fallen in love with the franchise without even realizing it.

5. Once You Start the Franchise, Stop Being Objective (in some things)

Like having an ugly baby, there are some things you have to lie to yourself about. Once you start the franchise, this needs to be the best, most amazing, absolutely spectacular decision you ever made. You need to tell everyone how you are going to crush your enemies and see them driven before you, how you will rob them of their wealth and see those dear to them bathed in tears.

As a tweet I saw recently said, “insanity is a moat.” If you want insane results you need an insane amount of belief.

So once you have objectively chosen the business, it's time to get a little crazy.

Franchise in the Spotlight: Paul Davis Restoration

Paul Davis Restoration is a leading property restoration company in North America, specializing in emergency services for residential and commercial properties. Founded in 1966, the company offers a comprehensive range of services, including water, fire, smoke, and mold damage restoration. With over 320 franchise locations across the United States and Canada, Paul Davis is known for its quick response, expertise, and commitment to customer satisfaction.

When you join the Paul Davis Restoration franchise team, you’ll get the most in-depth training in the industry. Our training program will give you the knowledge, confidence, and support to successfully invest in restoration businesses. All training happens at our industry-leading training facility in Jacksonville, Florida.

The Paul Davis Restoration Training Program includes:

• Interactive training at the state-of-the-art National Training Center in Jacksonville, FL.

• Ongoing opportunities to train in the latest equipment and techniques.

• Continuing education courses to keep up required industry certifications.

• Practical instruction on business management, production, and customer service processes.

• Education on local marketing initiatives and how to implement them.

Paul Davis franchise owners receive business support in five areas:

• A dedicated and experienced field representative to help you and your team with ongoing training and support.

• Longstanding partnerships with national and regional insurers.

• Dedicated Regional Marketing Manager to help the franchise train and manage their own local marketer.

• Professionally designed local marketing campaigns and materials.

• We manage your social media presence, as well as your digital marketing, including SEO, website updates and design.

Facts:

• Established: 1966

• First Unit Franchised: 1972

• North American Franchised Units: 320+

• Franchise Fee: $100,000 - $184,000

• Required Liquid Capital: $500,000

• Total Investment Range: $285,800 - $737,400

• Royalty: 4%

• Marketing Fund: 0.75% of Gross Sales

Earnings Claim from the 2024 FDD

FDD dated March 25, 2024

This goes on for all 177 franchises in the system…

This goes on for all 36 franchisees that have been open less than 2 years

Resale Valuations

Comparison

First we will compare Paul Davis to several other popular restoration franchises:

Next let’s compare average earnings for restoration franchises:

Paul Davis (2024 FDD):

$5.8M- average revenue of franchises that have been open more than 2 years

$2.4M- average revenue of franchises that have been open less than 3 years

911 Restoration (2024 FDD):

$559k- average revenue for franchises open less than 3 years

$1.3M- average revenue for franchises open more than 5 years

PuroClean (2024 FDD):

$551k- average revenue for franchises open less than 2 years

$1.5M- average revenue for franchises open for 7 years or more

Rainbow Restoration (2024 FDD):

$1M- system wide average revenue

1-800 Water Damage (2024 FDD):

$820k - system wide average revenue

Restoration 1 (2024 FDD):

$795k- average revenue for franchisees with 1 territory

$1.9M- average revenue for franchisees with 3 territories

Analysis

Paul Davis is, by far, the franchise with the highest average revenues. This is likely tied to three things, the largest territory size, working capital requirements, mindset.

But first, let’s look at which factors do NOT contribute to it being a top franchise:

❌ Training on restoration: Training in the restoration space is known to be phenomenal with many of the franchises having large training warehouses and extensive, hands on training with their franchisees. Paul Davis may be a slightly better job, but at some point you can only do the job so well.

• They likely do excel in training on business management and growth

❌ Insurance Relationships: Many franchises have insurance relationships for you to utilize but you are almost never the default. You are just on the list of approved vendors for that insurance company. You still need to make personal connections in the local market and spend on marketing for home owners to choose you over other businesses.

❌ Offering more than just water restoration: Some of these restoration companies are only water restoration while Paul Davis can do fire, mold, and smoke. However, many of the above franchises do more than just water damage.

Let’s talk the three things that do move the needle:

✅ Territory Size: One territory of Paul Davis is 2-5 times as big as other restoration franchises. This means less capital goes to franchise fees and owners get more households and businesses to service. Even if everything else was even, a Paul Davis franchisee could expand to be much larger in one territory than any other franchise.

✅ Working Capital: Paul Davis requires $150,000-$200,000 in working capital above all other costs while other restoration franchises are usually between $25,000-$50,000. Since franchisees are being paid by insurance companies, there is a 45-60 day period where you are paying employees for labor but you aren’t collecting any revenue on that job. The more working capital you have, the more jobs you can take on without running out of cash. This means a Paul Davis franchisee can grow significantly faster than any other franchise can.

✅ Mindset: Paul Davis only accepts franchisees who want to build very big businesses. They want former business owners and executives who are coming in with the mindset and capital needed to scale quickly. This level of growth requires a dedication and mindset that the other franchises don’t screen for.

Overall, I would grade Paul Davis an A+ franchise.

Who is Paul Davis not for?

Paul Davis seems great, but this isn’t for everyone. You need to be fully dedicated to the business. You should be prepared to eat, sleep, and breathe Paul Davis. Be ready for 1am calls to respond to emergencies. You need to know you can lead blue collar employees and deal with customers who are going through a major catastrophe. You also need the large upfront investment plus living expenses to get you to profitability.

If you are unsure about any of these things, you should probably find something that is a better fit.

Want to check if a Paul Davis is available where you live? Send me an email- [email protected]

Personal Reflection for Franchise Candidates

Many people want to leave their job and own their own business because they don’t feel joy or energy from the work they are doing. This makes them want to start a business related to something they are passionate about.

This is a mistake.

Your passion is usually the widget, not the business.

Take fitness for example, a good workout is a dime a dozen. Hiring fitness instructors is easy because there are a ton of them “following their passion”. You are probably buying the same equipment as everyone else.

So what separates a successful gym from a non-successful gym? Sales and marketing. Relentless sales and marketing.

You went into this gym business because you love fitness but you aren’t a better salesman than the 5 other gyms your potential client visited on their class pass, so you miss the sale. You close someone every so often but 3 years down the road you realize you left a great paying job, health insurance, and your Saturday mornings to scrape by. Oof.

So what should you focus on? What you’re really good at.

Find a business where success or failure hinges on the owner having the talent and knowledge you have. And since you’re the owner, you can set your own schedule so you can go to whatever fitness class you want (at some gym run by a guy who is scraping to get by because he followed his passion).

Maybe you feel strongly about helping a certain group of people. If you can’t make a lot of money helping those people, get a business where you can and donate to charities helping that cause.

People like doing the things they are good at so even though your highly profitable business isn’t your “passion”, you will probably enjoy winning.

Ask yourself, what am I good at? No, what am I the best at? Then, find a franchise that needs owners like you.