Nick Lopez and Rick Grossman reflect on their journey establishing the foundation of LIME, the nation’s largest and most successful luxury painting company. Nick and Rick initially connected on their core values, specifically creating a franchise culture where franchise owners come first. In this episode, Rick discusses the key strategies for building a successful franchise system. Nick and Rick reflect on their time together at the Franchise Hub and when Rick helped Nick start LIME Painting, which has 80 locations in just two years. Then Nick dives into Rick’s entrepreneurial journey as the founder and CEO of a brand that grew to an impressive 120 locations in just two years. They talk about the Franchise Bible Coach program, discussing how it helps brands with zero franchised locations build the necessary infrastructure to start the process of becoming a franchise. The two share insights on building a successful franchise system and creating a franchise culture where franchise owners come first. They also stress the importance of values and doing business. They focus on the people in the business and the people that they serve. Tune in and gain valuable insights and strategies to take your business to the next level through franchising.
I am honored to have my longtime friend, mentor, advisor, coach, you name it, the author of Entrepreneur’s Franchise Bible, Rick Grossmann. Welcome.
Thank you. It’s good to see you. It’s an honor to be here as well.
You and I go way back to some of my startup days, and it was not that long ago.
It seems like yesterday, but it was a little bit longer than that. It’s been so much fun to watch you develop into a powerful franchise leader. I’m excited to see what you have in store.
Thank you. I appreciate that. You have a unique perspective on myself and LIME. The hours, days, and years that we worked together in establishing and building the foundation of LIME. I’m grateful for you and the team there at the Franchise hub. It was a special time in my life, but the development of myself as a leader. I leveled up during my time getting to know you, your family, and the family at the franchise hub.
You and I bonded initially over where franchise owners come first. You and I connected on our similar values. LIME is a values-based company, with Love, Integrity, Mission, and Excellence. I appreciated that time at the Franchise hub and being mentored by you. One of the things that you instilled was franchise owners come first, and it’s not just a statement on a coffee mug. What does that mean to you?
One of the things that I have always considered to be very important in my coaching franchise executives all over the world now is what are the important keys to success in a franchise business? I was talking to a brand-new franchisor, and some people think it’s about selling a lot of units and some think it’s about pumping money into marketing, and all of these things.
The reality is the balance between the franchisor and the franchisees, the collaboration, and the common goal, respect, and trust there. When you look at what is the key to success as a franchise organization, it’s all about the franchise owners and their success. It sounds cliché now, but your success is our success. That’s what everyone says about any line of work.
With the franchise system, if your franchise owners aren’t doing great, you are not doing great. The franchise owners come first ethos is I encourage my clients to wake up every morning and think about how they can help their franchise owners succeed and do better. As you said, it’s a true belief. It’s not a cliché or something you put on a t-shirt or a coffee mug. It’s something that you have to believe in and embody.
It’s like you and I are both happily married guys and we know that we keep our priorities straight. We never put ourselves above our faith or spouses. It doesn’t work so well, does it? When you wake up in the morning and think, “How can I serve my Lord? How can I serve my wife and my children?” you have the right perspective. It’s that servant-leader model that I talked about in the book or the upside-down pyramid and the things that we talk about thereby being the servant-leader. Being committed to the success of the franchise owners is the key. The ones that get it, get it. The ones that don’t, don’t.
It’s all about the success of the franchise owners for the success of the franchisor.
I could take so many snippets there and it’s just gold. It’s unbelievable to me, especially in my field of work with contracting, painters, showing up, and doing a good job, paying a painter timely, or even acknowledging and treating them like people. We are talking about it here in the context of franchising, as a franchisor or franchisee understands that the franchise is about the franchise owner. How does that get lost?
All the years of coaching that I have been in this industry, it comes from the standard experience a lot of franchisors go through, where they are the employer, and their employees or their team learn that management relationship and carry that into the franchise relationship. Not that the business owner and an employee should be a bad or adversarial one, but it is more of a directive type business model.
When you get a franchise group and attach it to that same company, they tend to go with what they are used to and start treating the franchisees like their employees. That’s not the way it works in the franchise business. I see why that pattern can happen so naturally in all of our coaching programs and leadership groups. We are starting mastermind groups now and we focus on the same first thing, which is leadership. Focus on that servant-leader model right away because if they don’t get that part, the rest of it doesn’t matter as much.
You started a franchise business yourself where the franchisor grew it to 120 locations or so in a couple of years.
It was 150.
There are not too many folks who do that. As I said, it’s been an honor to have been coached and mentored by you. I don’t even know this, but how did you get into franchising?
It’s not like a little boy is laying in bed at night and dreaming about growing up to be a franchisor. I was always entrepreneurial. A lot of people can’t believe that I started out in business as a DJ because I’m a pretty mild-mannered guy most of the time. If you get me around some turntables, you got to watch out. I ran a DJ business in high school when I was 16 or 15 years old and I was making more money doing that than my friends were making working at the local fast-food restaurants, even though I did a little bit of that too.
I started to understand and appreciate the relationship between a business and its customers. I learned a lot from that experience. I did work for the McDonald’s company when I was a crew person and a manager, but I learned a lot about customer service and professional business practices. I had a lot of responsibilities as a young guy.
When I got into college, I wanted to level up. I was maxed out. We had the biggest and most successful entertainment company in my little town of Santa Barbara, California. I had people starting to ask me about expanding into other areas of our markets. The only taste of franchising that I had was working for McDonald’s, which was a pretty neat experience when I was a young person. I learned about the structure of a franchise and still didn’t have a real clear picture of what it was all about.
I was a Marketing major in college. I tripped into a class one day where my Marketing professor had brought in a special guest. He was the founder and CEO of Cashland, a check-cashing franchise. I don’t even know what the history of that company ended up being, but it was interesting to hear about the structure of a franchise, franchisor, and franchisee relationships, and things. A light bulb went off that day. I have been obsessed with franchising ever since.
It made total sense to me that if I have got a system for doing business and others can adopt that system and do better or even adopt that system and go into a line of work that they have never been in before, with the training and the structure I had learned at McDonald’s, I knew that I could do it. Back in those days, we used to go down to the library, but we didn’t have the internet. I picked up Franchise Bible as a series that goes back about 30 years maybe more. The original author of that series is Erwin Keup. Unfortunately, he has passed away.
If you have a business system that others can adopt and do better on, then you may have what it takes to franchise.
I did what we call primary research. I flipped the book over and saw his picture on the back of the book and called his office. I thought I’m never going to get through to this guy. He picked up the phone and ended up being a great guy. He’s like, “I love Santa Barbara, why don’t I drive up there and meet you?” He’s only 100 miles south of us. He came up and we sat down and talked. He became my mentor. He taught me the franchise business and became a good friend.
We worked on projects together. We used to talk about franchises all the time. Anytime our wives got tired of us talking franchise, we’d have to get on the phone and geek out on franchise stuff. He then asked me to be a contributing author and then he passed away, but he handed the reins to me, which was a great honor for the Franchise Bible series. Now, we are proud to be carrying on the torch that he started many years ago. He believed the same things that we believed like servant-leadership, the franchise owners come first, and all of the things that make franchising work as well.
You have had a very dynamic career. When was it when you leveled up in your career?
One moment was when the light bulb went off and I finally realized that franchising was the way to go for me and I was in school. It’s probably, the first conference and convention that we had when I was franchising AMS Entertainment and grew that. Again, the conference and convention for the travel business where we set records in that business. We were selling about 50 franchises in 1 year to 150 units in 2 years and 6 months.
Back then, that was pretty incredible growth. We had our conference and convention in Mexico and in Hawaii. Those were times when it made sense to level up and go for the next step. That’s what franchising’s all about. You have probably heard me say before that if you are a successful franchisor, you are always in the startup business because you are always starting new franchises and launching them every month.
You get to the milestones like 50 units to 100 units and then get to 150 units. You get to experience a different version of your business as you go through it. You should consistently be leveling up on an ongoing basis on the side of your team as well much like you have. Those were some pretty dynamic moments for me as a franchise leader, which was seeing not only the growth in the numbers of franchises but seeing the successes that they were having.
Some of my favorite moments were when the franchisors would stand up and give their testimonials at the conference. I have had grown men stand up and cry talking about how they put their kids through college and all the neat things. One time we had a franchisee propose to his fiancé at the conference because we were the closest family he had. It’s a neat family environment. It’s fun to see relationships grow within the brand. Those are all part of it as well.
We had our first conference in Florida in 2022. Being able to see the LIME family come together and share some of those early successes and have the award ceremony is what it’s all about.
That’s awesome. Congratulations. That’s a milestone.
It was a fun milestone and we are preparing for our second one this 2023. We are looking to do Cancun. We are getting that all finalized. Being able to honor and recognize the hard work, dedication, grit, and all these amazing victories. Winning and victories are about overcoming obstacles and failing. That’s learning, growing, and leveling up, in this context, the franchise system. You have never been in the playbook, gone through the tech, and the marketing. There are a lot of first times through that. As with anything with first times, it means that there’s uncertainty. With uncertainty, there’s fear. That is the meat and potatoes of franchising. That is such an important responsibility.
Like anything with first times, there is uncertainty. With uncertainty comes fear.
You recognize that and that’s important because a lot of people and leaders don’t. I always say when you accept a franchise owner into your network, you are taking on some pretty heavy-duty responsibilities. They are trusting their finances, putting your colors on every day, and living and breathing your dream and making it their own. It is a lot of responsibility. Sometimes it’s taken too lightly, but the servant-leaders get it.
At the heart of that is a dream. Every franchise is somebody’s dream. It’s their dream for everything that business ownership provides. The independence, the flexibility, and all of the things that Corporate America doesn’t give you. In fact, it takes all of those things and not a lot of people build up the will and confidence, and willingness to go against what even their closest family and friends may think is best for them. It’s a rare space to say, “I want to get into business ownership.” The beautiful thing about franchising is you are in business with other business owners.
It becomes part of their dream or becomes their dream. It sounds like the last few years you have grown in leaps and bounds. At this point, you are running towards 100 locations in the last few years, which is fantastic. It says a lot about your leadership, your leadership team, your commitment, and being an integrity-based leader, which is rare these days.
You got to be passionate about it. You have been passionate and focused ever since the day I met you. It gets more passionate and more focused which is great. That’s a trait in you. When you see that you can share that little bit of a dream with these individuals that are around the country that are looking for their dream, they want to jump onto somebody’s tracks and build a business. They connect with you and you find that right match. That starts to spread a fire.
That hockey stick growth we talked about where you do that consistent growth at the front end of a period of time, that might be six months or a couple of years. All that compound focus and success that your franchisees are having and everything starts to tweak out and get streamlined. All of a sudden, you have that hockey stick growth which is a hallmark of good successful franchise companies.
We would talk about all these concepts as we were incubating and establishing the foundation of LIME. To see these things come to life and have your coaching as the foundation for it, it’s been stabilizing and giving me a lot of confidence to take on the growth. As you said, a franchise system, that’s the traditional hallmark or that hockey stick trajectory takes a certain level of understanding of how all that works. Franchising is a different business than the paint business.
You are one of those people that wants to consume knowledge which is another thing I have always loved about you. Some people want to get enough information to skate by so they can get to the goods or the growth and the money, but you are always the one to buckle down and know everything you could know. I never had to worry about having to chase you down.
You were always ready to roll and jump into any initiative that we had, whether it be the Fight Fear Franchise challenge, one of the cooperative marketing programs, or even volunteering to participate in giving back or helping others in our universe, the franchisors. Having that appetite for that learning and knowledge is part of becoming a great franchise leader.
That’s what you are talking about with leveling up, I would assume. How do you become a great franchise leader? It doesn’t mean you are the rich guy sitting up in the tower counting the gold. It means that you are a servant-leader at the bottom. You are going out there and working hard to keep your franchisees growing and successful. You are praying, working, and doing whatever it takes to help them grow and become more successful. That’s the key. The more you give, the more you get. The franchise model is much like life. You spent that time in that first couple of years learning everything you could about becoming great as a franchise leader.
When the growth started to hockey stick, you did the right thing with the early adopters. I preached this all the time. You get those first few early adopters that are going to help set the pace and be great validators. They set the pace for what the other franchise owners will look like. You have Matt and Tyler, your first franchise owners that help usher in the new proof-of-concept franchisees. They are the ones that didn’t necessarily have an inner circle relationship with you.
That goes into the second stage. Once you are past that second stage, you are going to the outside world, the proof of concept, people, and beyond, and then that’s where the hockey stick happens. We have a little diagram on our website that shows those steps. You marched through those steps perfectly. You got the fundamentals down in the beginning so that you were ready for it and look what you have done in the last few years. It’s pretty impressive.
I have learned, “Look what we have done.” I’m more so get-in-the-way.
Try to let your team run and not trip them up.
What do you think is something that’s been surprising to you that you have learned and realized throughout your franchising career about franchising?
It surprised me a lot. When I was a new franchisor, I thought everybody was going to want my franchise and that everyone was going to be successful. I couldn’t understand why people would invest money and then not be successful. I started to realize it had nothing to do with the investment. It had everything to do about the people. Is the connection of the franchise model connecting with the person and whom they want to be?
It’s what I call a mismatch. You can’t take somebody that’s a total mismatch and have them buy a franchise and then totally change their stripes and make them successful at whatever. There has to be the right combination of things. The most impressive and impactful realization I have had in franchising is that success is based on having the right franchise system, a good one, a great leadership team, commitment, and then picking the right franchisees. It’s a match between the brand, the people, and their attributes.
Success is based on having the right franchise system, a great leadership team, the right franchisees, and commitment. It’s a match between the brand, the people, and their attributes.
One of the things I do quite often is I get calls from people that were mismatched. They ended up buying a franchise for the wrong reasons or they ended up having buyer’s remorse after 6 months, 1 year, or 2 years. I have had people sit in my office and cry because they were so disheartened about their decision. What we try to do is help direct them to a better match. When you find the right one, it’s like finding the magic.
The biggest surprise for me is seeing those dots connect for the right people and seeing magic happen. People talk about lightning in a bottle all the time. You found your lightning, but the idea is in order for that lightning in a bottle to happen, you need to have the right connections or the right franchisees, the right franchisor, and the right executive team. It all has to click and then it happens.
How do you level up or reproduce that magic? It’s the constant gap that’s being closed. How are we getting closer and closer to that ideal avatar? I can’t tell you how many times I have had somebody at decision day and the team and we struggle around, should we award this territory to this person and then they become an owner and they have what it takes to build a business in.
You have similar situations where it doesn’t click as fast. Maybe it’s someone that comes in and it’s the ideal fit and yet their results are lackluster. That fit is taking a while to click. It’s a science but yet an art. I don’t know if you can ever get the perfect formula, but that’s the art that goes into it. There is science and there is art. There is an eye, a gut feeling, and intuition.
Franchising is a science and an art
It’s like being a parent. I have four children and you have four children, and they are all different. They have minds of their own and we try to guide and help them. They make their own decisions. In relationships of any kind, we have to understand that everybody has their belief system, things that inspire and motivate them, and everything else.
A great franchisor is a great coach. To be a great coach, you have to be willing to adapt somewhat to the franchisee or the client. It’s like we do. I have franchisor executives all over the world that I coach and they are all different. Not everybody has the same operating system. The way that I encourage people to capture that lightning in a bottle and reproduce it is by having your system all figured out, and then being able to deliver the system to the individuals based on who they are. That’s the key. You and I are drivers. If you are a driver and you are trying to teach a driver-type of system to an analytical person, it’s not going to work for them. You got to come in because the system won’t work for them, but it has to be delivered, and talk to them in a way that they can do it and feel good about it.
We use a tool called Culture Index. They are based out of Kansas City. We took one of our franchisors, Tyler Fuss. Fuss now owns Boulder, Fort Collins, and Colorado Springs. All three are open. It was awarded three more in San Diego. You have spent a lot of time with Mr. Fuss and knew him all the way back when he was a VRC in Denver.
I remember. He’s a great guy and has a great team all the way through.
He’s leveled up. It’s been neat to see that lightning in a bottle happens there with Mr. Fuss. We were talking about Culture Index and Fuss went out. He’s been a leader at LIME. He would go out and get certified with our leadership team. This tool does such a great job of helping us understand. It doesn’t necessarily disqualify or qualify, but it does show us how you learn. Are you more methodical? Are you, “I need to get out and get my hands in it?” Are you introverted, extroverted, logical, emotional, with a high sense of ingenuity or not? Are you very conforming or not?
Within our platform, we have what we call the roster. It’s all of our owners. Apart from what’s on that display, a bunch of KPIs, where they are at in terms of their launch, but one of the things that we have on there are their Culture Index results. It’s how they learn and go about making decisions so that we can better support them onboard and from an ongoing standpoint, coach and support them. Do you remember our Sales Academy at LIME?
Yes.
We tailored four different profiles, directors, analyticals, agreeable, and extroverts. In those four profiles, a client can be a combination, but 101, we can’t deliver our re-spin presentation to a client if we are trying to communicate analytically to a director.
They have no time for it. Get to the bottom line.
Such as life. I wouldn’t be doing anyone any justice if I didn’t ask you this. What are some pieces of advice that you would give to a new franchise owner?
In the book, I put the franchise owners’ ten commandments and franchisors’ ten commandments. Staying in theme with the Franchise Bible. It’s the top ten things that every franchise owner can do to maximize their investment. As I said, it always surprised me when people would make the investment and then make the most of it. Sometimes that happens. If you are careful with your vetting and you are making sure you are connecting the dots with the right people, that’s pretty rare that you have a problem. Dive in with both feet and that means volunteering to participate on panels at the conference.
If you are careful with your vetting and make sure you are connecting the dots with the right people, it’s pretty rare that you have a problem.
If you have an owner’s advisory council in your organization, which every organization should have, run for it if it’s an appointed or an election-type thing. Be involved in the owner’s advisory committee. It’s going to be extra work, but you are doing it for the brand. If the franchise owner will take the same type of attitude about the servant-leadership and understand that the more they give to a franchisor, the more the brand will grow. You have that give and take or that servant-leader commitment on both sides.
Make the most of the program you signed up for, get into it, and know it backwards and forwards. Every time there’s a webinar, a class, or some way to level up your knowledge, take advantage of it. I always say to strive to be the top producer, not so that you can brag or stand up on the stage, or make others feel lesser, but be an inspiration. There’s a whole psychology to the growth of a franchise system where you have the top producers that are incredibly inspiring to everyone else. That’s usually in that top 20% or so. The other franchise owners look up to those folks and show them the way of maximizing their commitment and return on investment.
Be a top producer or try to be. Think about multiple store ownership like Tyler. He leveled up and got to a point where he started to feel like he needed to grow a little bit. Multi-unit franchise ownership is a wonderful way to level up. Some of the wealthiest and most successful people in the franchise world are multi-unit owners. Once you figure out how to do that system, it’s pretty easy to open up another market and go for it. It’s a wonderful way.
There are several more things on that list, but if you sit back and say, “What has the franchisor done for me lately?” and wait for things to happen, you are not going to be a top producer. If you commit to lock, stock, and barrel, and participate and give back to the franchisor, go for it. There has to be trust there in a servant-leader model. Go all in. You will find that you will grow much faster and much more success will come your way.
If somebody wants to learn more and listen to more of your content or level up through your content, where would they find you?
FranchiseBibleCoach.com is my website, and you can also search my name, Rick Grossmann on Entrepreneur.com. I have webinars and content on there as well, but either way, we’d love to be a resource for anyone that’s looking for some guidance out there.
I highly recommend it, but I am very biased. Thank you for tuning in. If you have enjoyed the content, please like, subscribe, and comment. As always, get LIME’d.
Thanks.
Rick Grossmann is a hidden gem in franchising. He personally grew a franchise system to over 120 locations in two years. His many years of experience are delivered through his world class Franchise Bible Coach program that laid the foundation for LIME.
Guest 1 Bio: Founder, Author, and Head Coach
Rick has been involved in the franchise industry since 1994. He franchised his first company and grew it to 49 locations in 19 states during the mid to late 1990s. He served as the Chief Executive Officer and primary trainer focusing on franchise owner relations and creating tools and technologies to increase franchisee success.
Rick developed and launched his second franchise organization in 2003. He led this company as the CEO and CMO growing to over 150 locations in less than three years. He developed the high-tech/high-touch franchise recruiting and sales system.
Both companies achieved ranking on Entrepreneur Magazine’s Franchise 500 List. During this period, Rick served as a business and marketing consultant to small businesses and multimillion-dollar enterprises. He also consulted with franchise owners and prospective franchisees, franchisors, and companies seeking to franchise around the world.
Rick is the Author of Entrepreneur Magazine’s Franchise Bible series, and his 9th Edition was released worldwide in April of 2021. He is also a contributing author to Entrepreneur Magazine and other industry publications on franchising and business.
He currently heads up the Entrepreneur Franchise Advisors program, serves as an executive coach and strategist for multiple franchise clients, and is the co-host of the Franchise Bible Coach Radio Podcast with Rick and Rob.