Chad Franzen 16:05
like so you have since gotten involved with as a franchisee with both Supercuts and Smoothie King, which one came first.
Michael Derrick 16:14
Supercuts so when i Little different ways, but yeah, so I parted ways with Tim’s, and I met up with a franchise broker. And I said, Look, I’m not interested in doing anything from ground up, I want to buy some existing businesses, what do you have available out there? So he came to me and I said, Hey, look, I got a great opportunity looks like a company brand called Supercuts is going to be going from corporate to full franchise structure. And I said, Oh, and eight, and they said, they have a package of corporate stores that they would like to sell and, and I said, Oh, okay, well, let me look at this company. I said, the last thing I want to do is get involved with another, you know, situation like I was with Tim’s I said, I want to find another, you know, family oriented, like, you know, really close knit company. So I went to discovery day out of Minneapolis, Minnesota, met the management team, really, really was like, Oh, this reminds me of 99 When I first got what Tim’s and, you know, they just, they wind you, they dined you, they cared about you, and all this. And I said, Well, this sounds like a great company. So I purchased my first package of five stores, was going to do more, I had some personal family things that were going on at the time, that precluded me from doing that. But I took on the five and it just, it was, you know, a major learning curve. But the good thing was, is that I didn’t have to worry about cutting hair, I just had to know how to manage a business. And so I took my administrative management skills to Supercuts and was able to, you know, over the course of since 2018, to where we are today have a very, very successful structure going on company, we are, we’re doing very well, I’ve got the top 25 store in the nation. And then on top of that, our other stores, you know, through the pandemic, through everything that we’ve had to deal with, you know, we’ve stayed in a plus five to 30% growth rate through this whole time. So it’s, I attribute it to my team, I’ve got an amazing group of stylists and management that love what they do every day. They love the people. And I love them. I mean, so it’s it’s great. We just just a good, good culture we’ve got going on that sustained us.
Chad Franzen 18:36
Sure. What are some of the primary differences in terms of managing or operating those kinds of stores? As opposed to the stores you were operating before? And also are there? Do you face the same staffing challenges that maybe people in the restaurant industry have faced over the past few years?
Michael Derrick 18:52
Yeah, so I mean, we, I don’t think we face the same difficulties per se, in our communities where we’re located, as a lot of the other restaurants have in the inner cities and things were more in a country suburbs area, away from the city, kind of focus. So I don’t I don’t think we’ve had that kind of issue. You know, we had a shutdown for a period of time, you know, while they were figuring things out, but aside from that, I think that was about the only major difficulty we had. But as far as the major difference between the restaurant, Tim Hortons kind of business, and this is that that was a 24 hour a day operation seven days a week. This business when I started took it over with seven days a week, but it was only about eight, eight to 10. Let’s say we opened at eight nine o’clock till about eight at night, so about 12 hour shifts. And so we closed that night, so there was that that whole overnight component was gone. And, you know, the stress of of that, like we were very busy on that. Don’t get me wrong, but, you know, we don’t see 10,000 customers a week, like I used to, you know, we see about, you know, depending on the store, you know, 500 600 customers a week. So, you know, it’s different, it’s more, you know, we can do more to but, you know, overall, the stress level is much lower, you’re only dealing with maybe maximum 10 employees per location, where before I had 32, you know, I average at a location, you know, between full and part time employees. So, yeah, I mean, is, there’s a major difference there. And structure wise, but, you know, the other thing too, is, is food and paper, like we don’t have, we don’t have to carry the inventory, and the levels that we had before, so there wasn’t a lot of that management of food and paper costs and things and products, you know, with us, we do have products, you know, we have colors and, and different treatments and things and, and shampoos and things that we sell, so, but it’s much more manageable. And you know, the volumes are very good. You know, they’re, they’re not as high as what I was with Tim’s, but then again, I’m not paying as much as I was. So you know, royalties, rent, all those things of those costs have come down, I’m actually responsible for, you know, my own leases now. So I negotiate all those, whereas Tim was Tim’s used to be the ones that negotiated that and then they propped it up, and then charged us more money on the end. So they made more money. So a lot of that’s been eliminated. You know, and also remodeling and costs are much less than what I had to deal with, with Tim Hortons. Very much lower. So there’s a lot of advantages there. And I’m really and the other good thing about it too, is you have the ability to manage these, you know, from any location, so I don’t have to necessarily live within 20 minutes of my stores, like I used to attend these stores. Now. I’m, you know, I live in Florida. So I have New York locations, you know, and opening some potential sites here in Florida, too. But I don’t have to live right where they are. That’s the nice thing about it. So there is a lot of differences. And I would say a lot of positive differences.
Chad Franzen 22:13
Yeah, you’re also you’re also now involved with Smoothie King, what drew you to being a becoming a franchisee with them?
Michael Derrick 22:21
Yeah, so you know, I felt like from the pandemic, I needed to diversify my holdings. And so I got other businesses that I do too. But this was I was kind of looking for something that aligned with my core core values. And I’m very big into health and nutrition. And, you know, Tim Hortons never really lined up with that. I mean, they started to get into more healthy menu items, but I wanted something that was like different. And so when I was spending some time and in Jacksonville, North Carolina, I started going to this place called smoothie, King and friend of mine introduced me to it and I was like, wow, these are really great smoothies. And so I really liked them. And then I found out that a majority of the product that they serve is organic, is all natural, it doesn’t have the added chemicals. It doesn’t have sugars added unless you get a specialized, you know, weight gain or type product. But they’ve removed all the added sugars and all these things. So I was like, wow, this is pretty amazing. It’s really something that interests me. So I started a little bit more. And then I started calling up calling some of my friends who were brokers and they said yeah, we can’t we can’t get you information on Smoothie King because they do everything from the corporate level. So they don’t hire brokers or any of that kind of stuff. So I was like, Okay, interesting. So I contacted Smoothie King corporate, and then met with their franchise consultant rep who, you know, helps people get franchises, you know, and they invited me to a discovery day I met their ops team met their management team, and was like really, really impressed again, with the management team, they very focused on growth but also very focused on franchisee and profitability of the franchisee and, you know, what they’re doing from a core level is, you know, they care about the customers they care about people’s health and wellness and, and nutrition and, you know, it’s like, it’s just, it’s just something that I just really really related to and so yeah, jumped in and, and so it’s just been, I think, coming out of the pandemic, just working with some of these landlords and things to establish leases has been, you know, a little bit on the difficult side plus we’ve had this crazy expansion of growth here in Florida. So with that being said, you know, it’s kind of like this perfect storm for you know, having issues with getting sites located but things are starting to pick up now I just in the process of signing a drive-through lease. So um, Yeah, I’m really excited about getting my first shop up and running here.
Chad Franzen 25:03
Do I know one of the things you thought was, you know, very, very nice about Tim Hortons was they had all sorts of processes in place that were very easy to make you successful. Did these two Supercuts and Smoothie King have the same processes in place? Or did you bring what you learned from Tim Hortons along with? Yeah,
Michael Derrick 25:20
so I mean, I brought a lot of obviously what I’ve learned from the past, my past success and things, but and past failures, too. I mean, there’s been times where things didn’t work out. And I learned a lot from that. But I think with the transitioning from Tim Hortons to to Supercuts, they did have a really great process. So they had a process whereby it was about a six month process three to six months where they take you step by step through the transition. Back then it was from corporate to franchise. So how do you navigate that transition? So, you know, that included training, I had to go to, you know, to Minnesota, Minnesota for a week of training, which was different from Tim’s because Tim Hortons was actually like six weeks of training. So that was a great change, getting everything done in a week. And then coming back, you know, I had a process by which to acquire each salon. So all the steps that were needed to get it done, they walked me right through the process, it was great. It was really great from the management level. So yeah, I mean, things were different. But I think in a much better way more concise, but it was, you know, there wasn’t as much to learn, as there was with you know, Tim Hortons, I mean, it was just, we had such an expansive menu. So, you know, coming into this was, was a nice change of pace, and then take over was, you know, it was great, it went really smooth. Again, with everything I had already in place. And the experience I had the staff was very comfortable with me right off the bat. We did lose a couple people, just because they weren’t happy about, you know, change from corporate to franchise. They just didn’t understand it. And, you know, they weren’t being patient with the process. So but it was okay, because the team that we did have became our core, and then we’ve built from there. So yeah, it’s been a it’s been a different pace. You know, we did go through a transition with Supercuts, which was really crazy because literally a year after I transitioned to Supercuts the management team for the most part was let go and the people that they hired that came in were actually the management team from Tim Hortons that came in they got fired from Tim Hortons or whatever, let go and then they got hired by you know, Supercuts franchise division to take over for whatever reason. And these guys came with the same philosophy that, you know, they had it at Tim Hortons, which was if you don’t like what we’re doing, get the hell out well bought, you know, you can sell your stores and it was like, Oh my gosh, well, the franchisees that, Supercuts were much more formed together with their Franchise Association, and they just weren’t going to take that kind of thing. And they stood up to the company, and literally, within probably six months, those guys were fired. And so now we’ve got a really great management team, and they’re, they’re working hard, they’re cooperating and working with us. And it’s, it’s a nice change of pace again, so I got a little worried that I was gonna have to like, exit.
Chad Franzen 28:31
Nice, well, I’m glad that’s working out. What is that? You mentioned the difference between franchise and corporate, what’s kind of the biggest mindset change that people have to have when they go from, let’s say, corporate franchise?
Michael Derrick 28:47
I think it’s the hands on, you know, franchisees are very hands-on, you know, it’s their baby. So you want to take care of your baby and make sure, you know, it’s functioning properly. And, you know, for me, there’s certain aspects of the business that I really focus on, especially as I’m growing it. And a lot of it has to do with cash management has to do with transactions, daily sales, and growth. So, you know, when I am analyzing a day-to-day basis, I mean, I’m, I’m in touch with my management team daily, I’ve got reports that I have generated, that come to me like, you know, 5:30 in the morning that I’m looking at, so I can I keep a handle on things because in franchisee corporate has deep pockets, you know what I mean? They’ve got millions and millions of dollars in the bank. They’re not worried about losing a few 100 grand here and there, you know what I mean? So, me that’s devastating, and I mean, so I have to watch every detail of the business and so, you know, the reports that I get helped me to highlight, just give me an example. If cash shortages for some reason, like corporate like when I talked to, you know, my management As I said, Did corporate ever, you know, talk to you guys about these things and watch this stuff that I like now? Now we’re like we were on the island. That’s what they call it, they’re on the island Gilligan’s basically all by themselves. And so, you know, literally me coming in, and, and keeping an eye on these things and talking and chatting with them, like I coach them, I don’t, you know, I don’t micromanage them, I coach them. And so what they found was is, you know, they weren’t used to that. And so the ones who weren’t used to it, they wanted that freedom to do whatever they want to do when they want to do it, that doesn’t work with me. And so it might work with corporate, but it doesn’t work with me. And so, you know, I am not, I want to work with them, you know, because I know that when we work together, it’s going to not only benefit them, but it’s going to benefit us in the company. So yeah, so corporate, I think a lot of times, they’re, they’re in their high offices in, you know, let’s say, Minnesota, and they’re not as in touch with the day to day, what’s happening in the salons, you know, they’re analyzing their metrics and things. But, you know, and then they, what they do is they have this top down approach, that then goes to the next level, if there’s an issue, so then that person, you know, by the time it gets to them, and gets to the friend, or it gets to the company to the store, I mean, there’s a lot of time that lapses, so with me, they’ve noticed like, immediately, when there’s an issue, they need something, it’s like almost immediate, you know, if they something’s broken, we get a fix, like before, they wouldn’t have to put in a request to get something fixed. You know, it took forever, you know, so they really liked that approach. They had to get used to it, you know, so that took a little bit, and now, you know, they’re seeing that this is really beneficial to them, you know, they can get things done, because I’m very responsive very quickly.
Chad Franzen 31:48
I have one more question for you. But first, tell me how people can find out more about what you have going on with Super Cuts and Smoothie King.
Michael Derrick 31:56
Um, you know, if they wanted to contact me directly, you’re talking about
Chad Franzen 31:59
Sure. Or I guess you probably just have the the regular websites the
Michael Derrick 32:06
Yeah, I mean, I don’t really promote myself in a sense like that. I’m even on social media and things like that. You know, but, you know, I’m on LinkedIn, people can contact me through LinkedIn if they’re interested. But yeah, I mean, right now, I mean, if people are interested in Smoothie King or they’re interested in Supercuts the brands, you know, you can go to the corporate websites and get more information. And as a franchisee, you know, we have a Franchise Disclosure Document, and I’m in that, so my phone numbers are listed. So if you ever wanted to chat, I mean, I’m always very tried to be very helpful, because, you know, when I came into the business, you know, a lot of the franchisees were willing to talk to me and share the ins and outs, the ups and downs, the good, the bad, the ugly, you know what I mean, with me, and, and I love that, I appreciate that. And I’m the same way, you know, I don’t want to see people come into a business because I’ve done it before I’ve gone into franchises that, you know, we’re very, didn’t have a lot of information, a lot of disclosure going on. And I really feel it’s important to get the proper disclosure, and I’m available for that. So yeah, anytime, contact me through LinkedIn, that’s the best way to get a hold of me and would love to, you know, encourage someone to, you know, either get into the business or find another business that you know, meets then suits their needs.
Chad Franzen 33:20
Sounds good. Hey, our final question for you. When you go to Smoothie King as a customer, what’s your go-to item of choice.
Michael Derrick 33:29
So, I am a, an avid, I like the 32 rounds. We actually we just came out with some new power smoothie lines, and I’m getting excited to go and try. But like, my favorite is the blueberry strawberry activator. I love that. And then you know, we’ve got these add-ons, add-ons that we can put into them. So I like you know if it’s a training day, I like to get my blueberry strawberry activator with my creative creatine. If it’s my off day, I like to get my blueberry strawberry activator with my diet down, which helps me to stay lean and fit. So yeah, I mean, we have so many different ones, but that that’s my go to,
Chad Franzen 34:13
what’s an activator is that like to get you going like a boost for the day or something? Yeah, so
Michael Derrick 34:18
It’s actually like a meal replacement. It has protein in it. Fiber, you know, it’s got like the right levels of ingredients that will help you to be ready for a workout, like to help you from a workout as far as to reactivate you from the workout or to get you ready to go into a workout. So, you know, I wouldn’t drink 32 ounces, like, you know, probably five minutes before I work out. But, you know, like within an hour before it’s fine, you know, that kind of thing. But yeah, it’ll power you right through your workout and or help you to recover from it.
Chad Franzen 34:50
Okay, awesome. Hey, Michael, it’s been great talking to you today. Thank you so much for joining me.
Michael Derrick 34:55
Thanks for having me. I appreciate you. So much, everybody.
Outro 34:58
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