Listen in to the Nicks as they discuss how their partnership has allowed for the two of them to found companies through the global pandemic. Nick Sheehan shares what it takes to build an organization that supports franchise brands as they take their local business national. Nick Sheehan talks about team building, preparing brands for national expansion, and why The REP’M Group is not your ordinary franchise sales organization.
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Nick Sheehan Is Known For Finding The Best Brands Poised For National Expansion
Growing Confidently With The REP’M Group
I have a great friend and partner on the show, Nick Sheehan. Nick, welcome.
Thanks. I'm excited to be on the show.
You and I go back a few years. We met in 2019 or was it 2018?
We met in 2018, and then we officially started to get serious about what we would do with Lime in 2019.
You've been such an instrumental strategic partner but mentor, friend, coach, and peer, and it's been an honor that our past has come together.
I would agree. Equal to what you said about me, I say about you. It's been a great partnership, friendship, and journey we have gone through so far. It has been pretty awesome.
I always share with our franchise partners that I love working with you because you help them in a very similar context as how you helped me when I was doing my due diligence and considering working with St. Gregory who eventually became a client, and they were sold. That led to what is now the REP’M Group. You are one of the partners with the REP’M Group. One of the things that I have been able to do is grow confidently in my partnership with the REP’M Group.
We go all the way back to the previous company that you were with St. Gregory to your founding REP’M. That's been a neat journey. Before that even became reality, you had shared with me, “I'm probably going to be starting my own thing,” and for me, it was a no-brainer. What you've been able to do with the team at REP'M I'm sure was a vision in your mind. From my standpoint being a partner to see that all come to fruition, it’s been a real blessing and honor. I have had a lot of fun and, most importantly, I have made some awesome friendships.
I appreciate all that. I was in my head whether I could pull it off and make it a reality was the big question. I had confidence that I could. What's cool is that you've been able to see it from month one because you came on board in February, and we started REP’M in January. Thirty days in, you signed and came with us and partnered together. You've seen it from inception quite literally.
It’s been an honor to be a part of that. The REP’M group is a special group. What got you into franchising? How did you get into franchising?
There are a lot of people that go to school to go to in financing. They want to be an accountant or lawyer. No one goes to school for the most part and says, “I want to be in franchising.” We all get into it by accident somehow and some way along the way. My accident happened in college. I was getting my MBA. Surprisingly, I somehow did get that, but I was going to get my MBA.
One of my colleagues told me, “We have this speaker. He's an entrepreneur and he's owned twelve businesses. He is in his 70s. He's going to talk about entrepreneurship.” I love entrepreneurship. I did everything from selling golf balls on the side on the 9th green as a kid, washing cars, shoveling, driveways, and all that stuff. It's in my DNA.
I met this guy, long story short. He had owned a lot of different businesses and was super successful. He was a Jewish guy from Brooklyn, New York. I talked to him after class about having a boat washing and car washing business in college with a friend. I asked him very simply, “How can I get more customers while I'm doing this in college?” He gave me some advice. My dean called me in the next day and said, “He was impressed with you. He wants to meet you for lunch.” My buddy and I went and met him for lunch at his country club.
I will never forget this. He said, “Do you see this nice golf course outside?” I said, “I do.” He is like, “I don't like to play golf very much. It's a great sport, but what I like is business. If you'd come here once a week, I will introduce you to a lot of great business owners.” All these older guys came. I feel like it was at a grumpy old men’s set, but it was great. One guy was a CEO. I met the Cofounder of Home Depot. It was pretty cool. I started going there. He said, “One day, there'll be a business opportunity that hits my table, and if you want to run with it with me, I will let you run with it. You can still go to school and all this stuff.”
I was a 22-year-old kid, and I said, “Sure.” The business that came on his desk was the ink and toner recycling business back in 2004 and 2005 when people printed more still. He said, “These guys in Fort Lauderdale are refilling these ink and toner cartridges. Do you know anything about that?” I'm like, “I have a printer, so I do.” He's like, “Why don't you go check it out?”
I went and checked it out and they were refilling these things and then sending them out to businesses, and they were getting orders for $1,000 in order from law offices and all this stuff. I started looking at it and he is like, “Do you think you can sell this stuff?” I'm like, “I don't know. I will try.” I started knocking on door to door I was like a Xerox salesman, so that’s what I did in South Florida.
Fast forward three months into it, I had sold $60,000 worth of ink and toner. He's like, “Maybe it's a real business. Let's see. Let's keep doing it.” We kept doing it. We started doing B2B business and started building accounts. We created a name that was super original, Cartridge Depot. We created a priceless and all this stuff. We started doing that and it worked, and we turned it into $500,000-a-year business in about eighteen months.
He had some franchising experience with a car rental business. They had about 500 locations which was one of his businesses. He said, “Maybe we should try to franchise this.” We opened a retail store in Boca Raton, Florida. It worked. They were from Baltimore. I'm from New York. He's like, “Do you want to move up to Baltimore to open another location where my family business is?” I said, “Sure.”
I did that, moved up there, and we opened another location, and then a year later, we franchised it. I then learned all about franchising from that. I sold the franchises. I trained. I hired people to help me with that. Fast forward five years into it, we had 35 franchisees. I owned 25% of the business, and we wound up selling it. It was a good inception and springboard. The other thing that he told me was, “This will be a springboard. You won't even remember this business.” The difference is that I do remember it clearly, but that was my way into franchising. It’s by accident.
That's such an awesome story of good old entrepreneurialism. In your career, what do you think is the most surprising thing about franchising that you didn't know before getting into franchising?
There are two things. If you are from an outsourcer's point of view, the first thing that people think about franchising is that everything is food like McDonald's or Chick-fil-A. I didn't realize how big franchising is outside of food. That was a big revelation for me. Two is how big the industry is. There are over 4,000 franchisors in this business, but how small it is at the same time. The camaraderie of which I have been able to build partnerships and friendships, I know other industries probably have something similar. I don't believe it's the same. It's such a great industry to be in. It is like a fraternity or sorority that you've built over the years, and it’s a pretty cool thing. I didn't recognize that until I got into it.
You've done all these different things in franchising. You are a multi-unit owner with CycleBar. How many locations do you own with CycleBar?
I have thirteen now. I have owned as many as fifteen.
You've done some amazing things in franchising. How do you help people level up through franchising?
There are a couple of ways. It depends if it's someone whom I employ or it's a franchisee, so I will give you two answers. When it comes to a franchisee, the way that I help them level up is by seeing their potential and what they can achieve. Most people who buy franchises have a lot of fear coming into that process, and second is most are what I like to call corporate refugees.
Most people who buy franchises have a lot of fear coming into that process. I try to help them realize it's not that scary if they pick the right franchisors.
People that are in Corporate America through and through have never owned a business before, and it's very foreign to them. They think franchising is a good vehicle. Now, they come in incredibly excited, but then as it becomes more of a reality, the fear creeps in. What I always call that is False Expectations Appearing Real. It is what FEAR stands for, and oftentimes it comes true when you are going through the process.
What I try to do is help them understand it's not that scary. Entrepreneurship is like a rollercoaster, but that's part of the fun. If you have a good partner and franchisors, if you pick the right one, are for sure the partner that you want to help guide you along the way. It isn't that much more different than if you get a new job. You are going to be scared. You are not going to know what you don't know, and you are going to learn it along the way and get better at it.
It's helping them see that vision. Don't be so scared of the unknown. The only reason you are fearful is that you haven't experienced it before. If you look back at what you've done in your career, Mr. Candidate or Mrs. Candidate, you are probably not scared of accounting if you've been an accountant for ten years because you know it. It's getting them to see that. The last thing is understanding the freedom that will come along the way if they do this. I have been an employee before in my life and I will never ever go back to doing that. It's because the freedom of entrepreneurship is powerful. It's getting them to see that.
The only reason you're really fearful is because you haven't experienced it before!
The second is employees. The thing I have always tried to express is being coachable. Helping people level up by number one, owning their craft, whatever that may be. What I have always found is that I have to be better at a company than they are. I don't mean that by like, “I'm a better person.” My system has to be developed for their success. If I can't get what an employee wants and hit their goals, I'm going to lose as an employer. I'm going to lose them. They are going to go on and move on to another company or something.
My mindset is always to build a strong culture, but it's also to build processes so that when someone comes in, it's not them that's the problem. If it's not working, it's us because I have a firm belief that 95% of the reason people fail on a job is for lack of guidance or communication from leadership. I have always taken that mindset of helping people level up. How do I do that? Make me better as a company to help them level up. If the company levels up, they naturally are on that boat and the rising tide raises all ships. That's always been the way that I have focused as an employer or a company owner.
Stewarding that responsibility of giving people on the team the resources, tools, empowerment, and direction that they need to be successful to own their career and level up.
I don't want to be a babysitter. I'm not hiring kids. I'm hiring adults. No one needs to micromanage people. People that micromanage people don't have security in their own self that these people are going to do their job. Give people enough rope and you let them do their job. They are going to prove it either that they are going to do the job because you'll see the results from it, or they won't. Don't micromanage them. It's going to get them frustrated. I have always found to let them do their job and they are either going to sink or swim on their own.
Don't micromanage people. It's only going to frustrate them. Let them do their job. They're either going to sink or swim on their own.
That lines up with get it and want it capacity. Is it the right fit? Sometimes that's not always known, and there are scenarios. When somebody gets it has the capacity, they need to be empowered. The momentum, compounding, and ownership of their craft is where the magic happens. The game has to matter and you have to be able to win. That's all we want.
You got to put the ball in LeBron's hands and let them win the game.
Was there a point in your career where you leveled up?
100%. I'm a victim of any other human. I had a lot of fear and anxiety when I wanted to step out and be an entrepreneur fully. It was on my mind for a long time. I started out of college, then I worked for someone, and went back to entrepreneurship essentially. The fear was because I didn't know what I wanted to do. I knew I loved franchising and entrepreneurship, but I didn't have enough experience to understand it fully at that point in my twenties. The catalyst for me was when I joined St. Gregory. It changed my mindset. The word level up is a very telling word to use for that company at that time.
They were a startup when I started two years in. The trajectory I saw were 2 or 3 brands that they had as just sales contracts essentially that we were selling for in the fitness and beauty space. To becoming a franchisor with CycleBar, we created that brand from scratch to launching in the next five years that I was involved with that company, 15 to 20 different franchise concepts and we would launch five a year.
We went from awarding probably 10 licenses a month to 150 at times. I saw so much growth and I saw emerging brands go from, “We have 5 locations to 500 locations.” I saw four private equity flips. I saw us flip the private equity and create Exponential Fitness, which is now a conglomerate of CycleBar and nine other brands that make up the largest boutique fitness concept in the world and a publicly traded company.
I experienced all of that. I always say I had a crash course in the five years that I was there that most people will never get the opportunity to, and frankly you can't get it now. The franchise development game has evolved and they were the ones that paved the way for what it is now. I got to go along on that ride as I was Chief Development Officer there, and it was a great journey.
It helped me level up on so many levels, but the biggest thing was I don't have any fear anymore. I'm like any other person. I will get butterflies in my stomach when I start a new business and I get anxiety and all the other things that we all get, but I don't have fear that I will make it work somehow, some way. Might not have the answer now and what that looks like, but I learned that you got to go through it. You got to live through it and you got to keep pushing forward.
At the end of the day, there are only two things that are guaranteed in life, death and taxes. I always say that. It's a morbid thing to say, but it's true. Anything else is you got to move through it. I'd like to say by the time I'm retired, which maybe I never will, but maybe by the day I die then., I have done everything humanly possible in entrepreneurship to level up and help other people level up because it's not about me.
I want to have done everything humanly possible in entrepreneurship to level up and help other people level up.
I know what I get when I help other people level up. That's the most important thing, but that was the big moment for me when I was able to get to that next level and see how big franchising is and become a part of that elite part of franchising, which is franchisors that get to 100,000 to 500,000 locations, which is less than 10% of franchising.
St. Gregory helped you to level up and it was not only career but life-defining and set you on a totally different trajectory. I'm grateful that our paths cross.
I am as well.
It’s been neat to see your talents and character on display. You and I hit it off right from the beginning because of our values. I have seen you be consistent with the things that you've said and you've done. You've done some amazing things and I'm sure in your eyes you are getting started.
I hope I keep continue to grow and do more things that I can't even see now. That's my goal.
Thanks. I want to honor you for all the commitment, work ethic, grind and hustle that makes you who you are. It makes franchising better. I'm glad to be a partner and to know you. With all of that being said, what has created this passion that has led to all these amazing things?
One, I started with building blocks. I love building companies. It is a passion of mine. I like to see things that are a germ of an idea that turns into, “Maybe this could be a business,” that turns into, “Let's try this.” It turns into, “Look what we are creating.” The final level is where we have gotten to where REP'M is this is an extremely fast-paced growing business, and it's awesome to see that.
The other thing I like to see is the growth of people. That's a huge passion for me. As I said a little bit earlier, I love helping people. It's in my nature. If I can help people get ahead in their career, buy a business, and be successful as an entrepreneur or whatever that may look like, that's what I am passionate about, and in developing relationships.
I love meeting new people, different walks of life, and different business opportunities. It’s cool to hear people's story. Those are the things that keep me going day in and day out. It is understanding that. At the end of the day, that's the source like building businesses and helping people. I love those two things and it makes me want to get up and be more passionate about building more businesses and helping more people.
I have heard you talk quite a bit about relationship-based franchising. That is the core of franchising, the power behind and the collaboration. You can't get that in many spaces. The independence and freedom, the innovation that happens from business owners being in business together, that is people.
Everyone has to sign contracts. I like to be a handshake guy. I wish I could go back to those days of handshake deals. It doesn't work that way in the world we live in. Lawyers have changed that. I always look at franchisors that manage their business through the contract. One way or another, they will burn themselves at some point or another.
Franchisors that live and breathe by the relationship and how we move forward to make sure that everyone's successful is the key. That's relationship-based franchising because you are not pulling the contract out and saying, “This is what this says.” You One thing I have learned with the best franchisors I have ever been a part of is how they manage it. They have got to keep the system consistent so you got to have those contracts, but they are not looking at it from a day-to-day basis on how they help their franchisees meet or exceed their goals.
Everybody's has the same objective, deliver maximum value. For example, here at Lime, it’s Lime Painting. Unifying as the Lime fam to level up around delivering value in the marketplace. That is at its core collaborative, innovative, and filled with leveling up. Otherwise in the marketplace, you won't be providing the most value for very long. Constantly innovating and adapting to the market to continue to provide that same level of value. It is co collaboration at its core. What do you think are the two things that make a brand successful?
The first thing has to be there no matter what, unit economics. If the business doesn't make money, it doesn't make much sense. They got to have solid foundation. What I tell emerging franchisors is, “Whether you have 3 or 20 locations as an emerging concept, your locations need to be making money.” There's a variation to that. Each location is going to be a little different, but it has to match what your initial investment is to do a potential return to compete against franchisors that have that similar investment and similar potential return. That's the number one thing. If that's there, then there might be something to franchise. If you don't have that, don't franchise your business.
I would say the second thing comes down to two things. One is, do they have a differentiator in whatever space they are in? You and I talk about this all the time. You are in an age-old space. Painting is nothing new, but you are doing something different. You've created a new path and a niche and white space is available for Lime because you are focusing on the high-end home value that not everybody else is laser-focused on like you are and other services you offer.
1) is having that white space either in an age-old business that you are changing the way things are being done or finding a niche in there in that market. 2) is you are paving a new way in a market that doesn't exist in franchising. Something that either has not been scaled or hasn't been franchised, which is a little bit rarer, but I have seen that a few times. When we launched CycleBar, there was no indoor cycling in franchising. There was corporately-owned Soul Cycle and what have you, but nothing in franchising. Those are the things that I would say my answer to that is.
What advice would you give to a new franchise owner?
I firmly believe that most people that look at franchises don't know what they want. They first look at what they see. I want to own Dunkin Donuts. That's great, but that might not match your investment level, what you want in business, and maybe what you want to earn and what you want to do with your life. I always say that you can research it on your own, but if you hire a franchise consultant, there's a lot of value there. It’s a free service to you like if you hire a real estate agent to help you find homes. Franchise consultants will spend time with you to get to know you, what you want, what you can afford, what your personality matches and so on.
It helps eliminate things that you shouldn't be looking at. That has values. Do the research upfront. Hire a consultant that's an expert to help you define what you are looking for. You then find brands because they will define what you want. Also, they will match you with concepts that are good concepts and have good backing and leadership in a good industry with good unit economics. You don't want to get involved with one that doesn't have those things. It's mitigating your risk by doing that.
Once you buy the franchise, let's say you move forward with one of those, follow the system. The biggest thing that is an issue with franchisees is that they come into a system and they want to recreate it. That's not necessarily a horrible thing down the line to help a system grow and get better as a system, but when you are new and you've never done whatever businesses you are buying, don't try to reinvent the wheel.
Stay within the guardrails of the system, put your head down, and follow the playbook until you are successful. You are profitable and you've hit the unit economics that's anticipated with the brand amongst other franchisees that have already done that before you. Once you do that, that's when you can start innovating inside the system.
I always use the example of the biggest one everyone knows or doesn't know where it came from, but is an interesting story. McDonald's Big Mac was not invented by McDonald's. It was invented by a franchisee who was playing around with some things in the kitchen and figured out how to build the Big Mac. Those things come out of franchising, but the most important thing is making sure you pick the right one. Hire a franchise consultant to help you there. Putting your head down and following the system. Even if you think there's something to be changed, don't change it now. You are not there yet. You haven't proven your success as a franchisee. Those are the things I'd say are important.
It'd be like starting a McDonald's, opening a McDonald's, creating the Big Mac, and focusing on that from day one. Whereas the reality was that the Big Mac was created by an operator, an owner that executed on the business, and from that came innovation, the Big Mac. That’s such a fundamental but important blocking and tackling of being a successful franchise owner. What sage advice from Nick Sheehan. I appreciate you. Thank you for being on the show. If you've enjoyed it, please comment, share, and as always, get limed.
Thanks. I appreciate it.