From Corporate Grind To Franchise Ownership Through Multi-State Master License Pete Gilfillan
Nick Lopez and Pete Gilfillan, the bestselling author of the book Hire Yourself, unpack what the corporate grind looked like while Pete navigated through his career with some of the world’s most successful companies. Pete talks about what it was like to be an important part of Fortune 500 companies such as Ford Motor Company, where he bled blue. But ultimately, the travel and restrictions on his life didn’t provide him the independence and happiness he knew he could have through entrepreneurship. Pete recalls sitting in on hours of senseless meetings and having no control over that reality. Time and time again, subjective objectives were defined as the goals to hit, not to mention the corporate politics. Ultimately, franchise ownership was calling Pete away from the corporate rat race. Pete went on to own a multi-state master license with Junk-King Franchise Systems, Inc., and he hasn’t turned back. Today, Pete is living life on his terms and also doing it by helping others experience the same kind of entrepreneurial freedom through franchise consulting with the world’s top franchise consulting firm in FranChoice.
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From Corporate Grind To Franchise Ownership Through Multi-State Master License Pete Gilfillan
Pete Gilfillan’s passion for business ownership is rooted in his upbringing - after all, his father and grandfather both owned successful franchise businesses before Pete took on business ownership for himself.
In this episode, our guest had a very successful Corporate America career working for companies like the Ford Motor Company. He's a multi-state franchise owner. He also routinely co-hosts the podcast, Hire Yourself. He is widely considered one of the world's top franchise consultants and one of the top franchise networks in FranChoice, Mr. Pete Gilfillan. Welcome to the show. I'm glad to have you on.
I'm excited to be here with you.
You grew up pretty entrepreneurial. What was it like growing up in an entrepreneurial family?
My father and grandfather were Ford dealers. My dad was that local Ford dealer and was tough. He wanted us to learn to work hard. As a son of a car dealer, he would want me to work at the dealership. I would show up and he would have me detail cars, go move cars and all that stuff. One weekend he decided that I was going to at the age of sixteen, going to paint the inside of the whole-body shop. He bought it and I didn't know anything about painting.
He said, “Here's a power wash. I want you to spray everything down and paint this.” I'll never forget, that's the way my dad was. He wanted me to learn how to become an entrepreneur. It was good. He taught me to go out there and ask for it. I played sports in high school so my father would say, “Go up to your coaches and tell them that your dad could help them get a car.” He had me helping him sell at an early age.
It reminds me of my family. We started a small lemonade company and got the kids to learn how to ask, negotiate and manage the operations. It's a skill that I hope carries them throughout their whole life. In franchising, no one necessarily says, “I'm going to get into franchising.” Franchising generally finds you. Pete, I was curious how did franchising find you?
Ford is in its simplest form a franchise. Although you don't buy it, from a standpoint, you are awarded the Ford franchise. It's different from traditional franchising. I worked for Ford for seventeen years. One of the things I was responsible for was running very large markets. I had a team of 75 people and ran a market with 600 dealers. They were franchise dealers.
They were great business people. Car dealers are amazing. They have to work hard. It's a complex business. I worked for Ford and then ultimately worked for Terex to run their global sales. Terex is the third largest construction OEM. I got sick of the corporate world. It got to be too much. I had a young family. We were moving to travel. There’s too much pressure. Ultimately, I gave it up and started deciding what I wanted to do next. I always wanted to be an entrepreneur like my father and grandfather. I bought the rights to a large master franchise in the junk rule space, specifically Junk King. That's how I got started in franchising.
It's incredible. I didn't know that Ford Motor Company operated under that framework. What were some wins, lessons and tips that you learned during your career with the Ford Motor Company?
Ford is exceptional at training. From that standpoint, they did an exceptional job of training and I got a lot of opportunities to do things that I wouldn’t normally run like running a $5 billion sales marketing organization. You wouldn't get that if you weren't with Ford but I learned that you have to look at things, analyze them, understand what you got, make a decision and go forward. Sometimes Ford got caught up in the bureaucracy and stuff like that but I had a great opportunity to work for some exceptional leaders. They taught me to look at the situation and figure out what to do.
It's leadership. It sounds like the tips that you'd have is to listen, be coachable and allow yourself to be molded by good leadership.
That was a big part of it and understanding what is the situation, going figure out what you have to do and getting it done.
You rose through the ranks throughout your career working for different Fortune 500 companies, specifically the Ford Motor Company. Becoming coachable and willing to level up was important. What were other strategies or basic things that you executed day in and day out that helped you be successful in that Corporate America world?
1) You have to work hard and that's given. You got to show up. 2) I had a passion for always trying to make something better. For example, I was the guy at Ford where I was the first one to take incentives to communicate the incentives to dealers, like customer cash and APR rates. I was responsible for all those for Ford and Lincoln-Mercury. I was responsible for taking an old system where we used to communicate the incentives through a BAT system. We would put them in a computer system and overnight they would print at the car dealership.
We were the first to go out there and post the stuff to a site for the franchisees to see. I took all the incentives and took off an old system and worked with a company out of New York to develop a system where we can communicate immediately incentives or upload them to a site in a way in which they could understand them. One of the things that I loved about the ability to get into these things is to try to understand what's the problem and look at a system and try to fix it or make it better. Everything I did, I always tried to make it level it up from a standpoint and make it better and more efficient. How do we do that?
What was eventually your role with the Ford Motor Company?
My last role was as the General Manager of the Midwest market. I was responsible for about 75 employees. We supported 600 dealers in 10 states. Our job was to support these business owners, these Ford and Lincoln Mercury franchisees. That's what we did. I love car dealers growing up in that business. It was an exciting time at Ford. Unfortunately, we had a great recession in 2007 and 2008. That's when I left Ford. It was time. They offered me a voluntary separation package. I thought I'd spend my whole career there but it was an opportunity to go start something new so I left Ford.
When you drive by a dealership, what are some thoughts that come to mind? I'm sure you're thinking about operational things and nuances that the everyday person doesn't think about. Do you ever drive by dealerships and have thoughts come across your mind that pulls from your career with the Ford Motor Company?
I've got a passion for cars. One of my favorite things to do is go walk a lot. It's not so much fun when these dealers don’t have any cars. My favorite Ford dealer has eight new cars on its lot. It was a difficult business before. It's a business that is continuing to change. I look at those dealers that have millions of dollars invested in their franchise business, that facility, all the people, cars and all that stuff. It's a tough business when they're not getting the inventory that they need. There's a shortage of used cars because they can't get them from that standpoint. You have that and the pressure from the manufacturers as they try to transition to electric vehicles.
The model is changing and I believe that some of the manufacturers don't understand the value of their franchise dealers. They have a huge asset and everybody wants to be a Tesla but the bottom line is Tesla does not have a network of dealers. Those dealers are the ones who when somebody has a problem with their vehicle, they send somebody out to get help. When I had my car, the battery died in my garage. The car dealer came out, brought another battery and replace it right on the spot for me. That's the power of a dealer. I look at those dealers as great business owners. I hope the manufacturers continue to respect what they have.
Some of the manufacturers don't understand the value of their franchise dealers. They have a huge asset, and everybody wants to be a Tesla, but the bottom line is Tesla does not have a network of dealers.
What were some of those things that you did in that supportive role? You ran multiple states and supported many different dealers. What were some defaults that you settled into things that you focused on for helping your franchise owners level up?
They're all very strong. We're trying to always do our best with the product that we had. The product is given to the manufacturer. We give that to the dealers and the dealers have to then merchandise it. A big part of it is this ability to market, number one. How are you taking your tier 2 and tier $3 and leveraging them to get the best exposure?
Number two is the customer satisfaction experience. We're always trying to improve that. If you could get the people in the door, give them a great experience and have a great product which is a given, then you have a chance to increase your market share and everything is by market share, getting more than your fair share of it and that in turn makes you profitable.
Marketing return there being efficient customer service and satisfaction there, all for gaining market share, which I always talk about acquiring market share. It's one of my favorite things to watch. For us, lime-green signs are taking over neighborhoods and communities. What were some of those leading indicators or KPIs that you focused on that led to more market share and customer satisfaction? What were the KPIs, a few that come to mind that was important for you that you'd put your thumb on?
Number one was our actual market share or how we are gaining market share. You'd also be looking at dealers' customer scores or customer satisfaction scores. You want to see that we're gaining share and satisfying customers. Other things would be is spend in the marketplace. Are you spending the money that you need to do that? Are you carrying the inventory that you have? Do you have the right people in place at your dealership? It’s a combination. At the highest level, it's your market share and customer satisfaction score. How much money do you have in the market from the standpoint of promoting your product?
Pete, you were able to bring a lot of value to the franchise owners that you supported and unfortunately, the recession hit. You turned away from working with the Ford Motor Company but ultimately you didn't go back to Corporate America. Why wasn't the corporate grind?
From a standpoint, I had a young family and I always wanted to be an entrepreneur but it takes a lot to be in that corporate world. I loved it. You can build those businesses but the deal is that we were moving every twenty months. It was crazy pressure-crazy travel. It got to the point where I wanted to stay married and connected to my kids.
It wasn't worth the money and all the great benefits. My blood was blue with Ford and certainly loved the people at Terex but I always wantetald to get away from it. Once I got away from the corporate world, I realized there's a whole different world out there when you have your business, you are in charge.
You don't have a boss and you don't have to sit through senseless meetings. If you've been in the corporate world, you could be in a senseless meeting for an hour and a half. It could have been solved in five minutes and you're like, “Can we get this done?” By not having to deal with politics or artificial objectives, “We're going to hit this market share.” “Why are we going to hit that market share?” “That's what we want to hit.”
“Are we going to hit that market share and put additional resources behind it? What are we doing in terms of trying to get there?” I found out that you can live life on your terms and build something of your own where you don't have to put up with all that stuff. I pinched myself every day. I can't believe I'd been blessed to be able to go do my thing and not have to deal with any of that stuff anymore.
Ultimately, you ended up joining Junk King franchise systems and became a multi-state franchise owner. What are some lessons and wins from your career as a multi-state franchise owner?
I only owned it for a couple of years. The biggest thing I enjoyed about it is that I was a master franchisee. As a master franchisee, your job is to go find franchisees for the three states. I enjoyed helping executives and couples go and look at investing and building the Junk King businesses. That was the biggest takeaway. I realized that I had the passion to help others explore a path like I did, how I escaped the corporate world, giving people also a path to be able to do that.
A master franchise owner is different from a traditional franchise owner. What are some of those differences?
You buy the rights to a very large area. In my case, it was three states. As a master franchisee, your job is to help find franchisees for those states. How you bring in revenue or you're compensated is when somebody buys a territory in your market, if the franchise fee was $50,000, you may get half off that or a nice way to say it is you're getting your money off the table for buying that big area.
The second thing is that your job is to help get those franchises off the ground and help launch them. For that, you get a portion of the royalty. If the royalty is 6% of the revenue, you may get half of that or 3% going to you as the master franchisee. You certainly can open up your location. The master is about taking a large market area, finding franchisees and helping them be successful. For that, you get a piece of it.
Your job as a master franchisee is to help get those franchises off the ground and help launch them. You get a portion of the royalty.
What are some tips that you would share to help somebody level up around that master franchise structure?
You don't see many master franchises available. You'll see more multiunit ownership. Simply put, there's so much more money in franchising that most franchisors don't need the capital or assistance from having master franchisees. They don't need to give up some of the action to get the capital. There's so much capital out there. You don't see many franchise systems that have a master as I did. You're seeing more people looking to scale and build something with multi territories. Multiple locations from that standpoint where they want to go to the Dallas area and get 7 territories or 8 territories and build those out as their business.
Masters are not common but multiunit ownership is more so the theme. Pete, share with us what are some of the reasons that ultimately led you to become a franchise consultant.
When I was a master with Junk King, my job was to help find franchisees for junking. That got me turned in. At about the same time that I joined Junk King, I got the opportunity to become a FranChoice consultant. I was surprised because they're very selective in the people they take to become franchise consultants. I got the opportunity to do that and that's where I found my passion. FranChoice is an amazing organization with a great culture.
They have exceptional training and I got excited about helping executives become entrepreneurs. That's what I started doing. I ultimately sold my master franchise at Junk King so I could put more time and energy into my franchise consulting business. I've been a franchise consultant with FranChoice for years. It's my passion. I do it eleven hours a day because I can make a difference in people's lives. If I can do that, that's an awesome life to live.
FranChoice is very selective and has an amazing culture. What are some of the aspects that go into making FranChoice so special?
1) The caliber of people. They're very selective in whom they take so it has to be a good fit. 2) what separates them is they have exceptional training so they take you through pretty rigorous training. 3) The idea of the culture. In the culture, everybody is trying to help each other grow to become better. You don't see that a lot, especially in what we do. It'd be easy to focus on myself but we're all trying to help each other become better. Those are the three things that make it special.
People, training and community, a high-performance culture, collaboration and being willing to help one another are more of a collaborative approach than a competitive approach. In any high-performance organization, there's a competitive nature but it's not on the negative side. It's more of a fun competition. Collaboration is at the core. Ultimately, that creates a winning organization and one that's full of momentum. I call it the Yes train. What other aspects go into becoming a day-in, day-out successful consultant?
The biggest thing is this idea that you have to listen. I get the opportunity to talk to people every day and help them explore franchising. It does start with listening and getting a good understanding of what's important to them and what they'd want if they were going to take the path of investing in a franchise. That's a skill. You have to be listening and asking questions and be able to process that so you come out of that conversation with a good understanding of what are they looking for. What would be important if you were to invest in a franchise? That's number one.
Number two is this idea to teach. My passion is to teach. I'm a bestselling author of the book, Hire Yourself. I'm a podcaster. That's what I pride myself on teaching. Listen and understand what you're looking for and what you'd want if you were exploring franchising. Number three is to teach you so that you are growing and learning as you explore this path of potentially becoming a business owner through franchising.
It's the power of listening. I can't tell you, Pete, how many times you've said to be coachable and listen. There is this posture of humility that I appreciate and it's gone a long way for you. I can't tell you how many times I talk about and appreciate it. At the core of a business and being successful in business, there’s humility and patience, putting yourself second and listening, especially in a franchise system. Within franchising, there’s this posture of learning combined with entrepreneurship, which is all about freedom but within a franchise system, there's this aspect and period of learning the model.
Pete, I'm curious. You've done plenty of listening as a franchise consultant. You've had the privilege of working with many executives that are looking to make a transition into business ownership. What are some of the themes that you hear as you're working with your clients? Are there typical patterns or nuances that you're constantly coming across?
One of the things that I ask people is, “Why do you want to take this path of becoming an entrepreneur and investing in a franchise?” What most people say to me is, “I want to take control of my destiny, live life on my terms, create career and income security and diversify my asset and income. I want to be able to have a flexible schedule and build an asset that I can someday sell or could be a legacy for my family. I want to make an impact in the community.”
“I can't do that as an executive a lot of times because I'm on a plane all the time. I want to be engaged and have a purpose. I want to build, grow and lead a team.” There are many different things but at the core, they want to build something on their own where they can be rewarded for their hard work, go out there and make a difference.
There are a lot of aspects that you appreciated coming out of your career and realizing about franchising. Granted, the Ford Motor Company is very much a franchise structure. Pete, how has working for the Ford Motor Company and Junk King franchise systems translated to help you be a better franchise consultant when you're working with your clients?
Number one, I took the hard path. I left the corporate job and very high pay and ultimately became an entrepreneur. I walked away from the income. I had a young family but I started and put all my money into Junk King. I had no income starting from day one. I took one of the hardest paths to doing it and it certainly could be done. I do like helping people explore that. Most of the executives I'm working with want to do the executive model semi-absentee. They want to keep their corporate job and corporate income and start the franchise on the side.
They get the business going. They put a manager in place. They watch over that manager 15 or 20 hours a week. You always have to mind your business but it tends to be an easier path. If I can teach people that path, explain it to them and give them the opportunity to keep that income and job and start a business on the side. If only I can help people have an easier path to escape or create that diversification in their assets or supplemental income and build something that they can eventually capitalize on in terms of selling to supercharge their retirement or have an income for their retirement. Retirement's not seizing to work but it's doing something you enjoy whilst having a little money coming in. There are lots of different ways in which you can do it. That's the biggest one.
Pete, how do you evaluate a winning brand for your clients?
One is leadership. I want to know who are the leaders and what's their background. Two is what have they done in terms of the product or service. What separates them from everybody else? What's their story? Three is do they have satisfied franchisees? My job is to get a high look at franchises but the person that's going to invest in the franchise, the candidate, it's their job to do the due diligence.
Ultimately, it's their hard-earned dollars and they're the ones that going to have to go through what is called the Franchise Investigation Procedures, a series of steps that they get the information. I can only get a feel for the organization. I can present that franchise to the candidate but it is the candidate's process in which they go and evaluate that business and do their due diligence. They have to decide if it's a good fit.
Leadership is an important differentiator in the market. You talked about acquiring market share. The company needs to be differentiated and bring value to the market. To do that, acquire more market share and have a track record of being successful franchise owners. What are some things that you notice during that due diligence process that your candidates struggle with?
The biggest one is putting together the pro forma. Ultimately, they have to put together the financial evaluation of what they think the business is going to do from a revenue standpoint and expenses. The franchisors can give them some of that information through the FTD so they can gather some of the hard points and numbers but at the backend of it, a lot of the numbers come from doing validation calls and talking to actual franchise owners.
That's an arch to talk to business owners and develop enough rapport that you can ask them the financial questions and get the answers from the step point. One, putting together the pro forma is big. Number two is getting a feel for the franchise owners. Validation or talking to find out if they are happy with the culture. You'll learn that from talking to the actual franchise owners. “Is this something that I want to join? Do I want to become a partner? Do I want to become a family member or an X, Y or Z franchise?”
You said something there that I wasn't expecting which is the culture piece but even more so, there's an art to pulling out information and getting a feel for financial performance. Do you have any tips for how to go about that art during that part of the due diligence process?
You're calling a stranger in a very short amount of time you're going to be asking financial questions. What happens is people get to the point too fast. They want to know, “How much money this business makes? What's the net profit margin? How long does it take me to break even?” They're all brilliant questions. You'll hear that on group validation calls. The biggest advice I give people is to build rapport and create a connection with the franchisee that you're talking to.
It can be simple as, “How did you get into line painting?” It's easing into it by asking important questions. We are intrusive. An example might be, “How was the initial training? How was the marketing?” We want to continue to build rapport and ease into the questions. We can ask financial questions. If we put our work in front, we got a good chance of getting the answers to our financial questions.
This is the value that you bring to the matchmaking process. It's not as easy as XYZ and you have a franchise. The franchise is awarded. You are investigating a family and culture. There are so many elements that go into evaluating the business and options. How you go about it is an art. Pete, you do such an incredible job in bringing a tremendous amount of value to people that are looking to diversify and from your background, they can relate. Pete, you also have a podcast show called Hire Yourself. I've always wondered, why the name Hire Yourself?
My best-selling book is Hire Yourself for obvious reasons. I set out with the book, Hire Yourself, on a mission to help corporate executives take control of their destiny, live life on their terms and build wealth. That's a book that educates people. It gives them a path to escape the corporate world as I did. It's the blueprint. As an extension to that bestselling book, I do enjoy educating and helping people explore franchising. The podcast gives me the opportunity to talk to industry leaders and heads of franchise systems. You were on my Hire Yourself Podcast.
Great people like you. I also can help people become better business people or explores the path. Talk about goal setting or how we look at being an entrepreneur. What characteristics do we need to be successful business owners? I look at it as a way to continue to encourage people to explore the path of escaping the corporate world or building wealth through franchise ownership but also as a way to make an impact in people's lives.
That stemmed from your bestselling book, Hire Yourself or did the podcast come first?
The bestselling book came first. That's the foundation for everything Hire Yourself.
The book, which is a blueprint for this fast process, is complicated but I'm sure you simplify it. There are so many different topics that you can bring on subject matter experts and dive in on this or that aspect. What topics come to mind or some favorite topics from your Hire Yourself Podcast?
1) Talk to industry leaders like yourself. If I can have you on and you tell your story and what makes Lime special. It's not a commercial for your franchise system but rather it's for people to get to know the leader of an organization to understand what makes them special as an organization and individual. If I can do that, that's great. 2) If I can give people fundamental skills or training or I want to fund my business, how do I do that? I have some funding experts come on and talk about all the different options that you have. One of the big things tied to success is goal setting. For lack of better terms, a podcast episode on goal setting. It's about bringing great content to people to help them grow and learn about franchises or grow as business people or overall people.
Goal setting is one of those fundamental components of being a high performer and successful in business. You tie that along with being humble, coachable and listening. It's a combination that makes successful entrepreneurial journeys. Pete, you've had a vast background and career in franchising and you’re still in it. Pete, why do you love franchising so much?
I like franchising because I look at it in an entrepreneurial light. Many people want to become entrepreneurs but they don't have a big idea. They don't want to put in the hard work to figure out what the business model is and all that stuff. They want to take the path but it's not that easy. Franchising is a path that somebody has come up with the idea. They've built out the business model, tested it out and got a system. As the executive or individual, you bring your business acumen and capital. You leverage. You're experiencing capital into the business and following that system.
It's designed as, “I don't have to be an expert in painting to become an aligned painting franchisee.” Do I have to have some acumen, leadership skills and capital? Absolutely. I come into a great franchise like LIME Painting and follow the system. You tell me to do this and I follow the system. I suspect I can make the system better.
At a minimum, I got to follow it but I got to make it better. If I can do that, bring my skills and follow a system, I'm going to make fewer mistakes. Fewer mistakes save me time and capital and improve my chance of success. Is a franchise guaranteed success? No, but it improves your odds and will take the improved odds by leveraging a good franchise system.
You’ll make fewer mistakes if you can bring your skills and follow a system. Fewer mistakes will save time and capital and improve your chance of success.
Much of business is about competing. From a startup standpoint, it’s a new idea or business. You're competing with established businesses that have already taken the arrows in the back, made the mistakes and lost the money and the time figuring out the winning formula. Frankly, customers don't care. They're wanting to put their money where they're going to get the best value.
As a traditional startup business, that makes it very difficult. In a franchise, that's already been done. That playbook or blueprint is there for how to execute the business model. You add in the training, the support and all the departmental aspects from the marketing, the finance, the technology. That's all done.
It's more so plugging into the system and using your experience, coachability and ability to execute to become a successful franchise owner. Granted, that doesn't mean that you can't innovate and improve the business model but it's so paramount to exercise that humility in that early season as you're adjusting, transitioning and ultimately learning how to execute in a competitive marketplace within a business model-winning formula. Pete, it's truly been a pleasure. I could talk to you for so long about all these different elements of business, franchising and high performance. I hope that our readers learn some things and level up. If anyone's interested in getting in touch with you, how could they do that?
You can certainly go to HireYourself.com and put in your information from that standpoint. It's the easiest way to do that.
Pete, thanks for joining the show.
You got it. Thanks so much, Nick. It's always a pleasure getting together with you.
If you enjoyed this show, please like the show if you'd like to continue to level up with me and our guests. More importantly, go into the comments and contribute to the conversation. We talked about so many different elements of business, franchising and high performance. We'd love to hear your thoughts. As always, level up.
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