S4 Ep3: How to Launch a Cookie Franchise When You Don’t Bake
The secret ingredient to creating your own cookie franchise? People. Adam August opens the playbook to his fast-growing cookie empire.
Adam is the co-founder of Blueprint Cookies, the business he set up with Nick Hicks in 2019. The company has grown from one to three stores in three years and has ambitious plans to scale.
The Wolf and Adam get into why investing in your employees is the best choice you’ll make, how Adam gets shit done, and some expert advice for anyone looking to start a franchise.
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Episode Transcription
Adam August:
For whatever reason, I’m really good at building a team and ultimately to do what we want to do, we have to have a really good team. And although we are only at three locations and just getting into the franchising world, now I look at the people that I have around me and that’s what gives me the confidence that eventually we’ll be in the discussion with the crumbles.
The Wolf of Franchises:
Welcome to Franchise Empires, where aspiring entrepreneurs learn exactly what it takes to become a successful franchise owner from one location to 10 and beyond. I’m the Wolf of franchises. Hey everyone, it’s The Wolf. Today on the show is Adam August of Blueprint Cookies Blueprint is a new cookie franchise that gained popularity quickly in Florida and has won the award for best chocolate chip cookie in the state. Not only that, they have an incredibly scalable concept that only requires a few employees per location. They’re also taking a unique approach to their organization and their goal is to revolutionize how quick service brands treat their employees and their franchisees. Adam’s a great guy and I think you’re going to enjoy this conversation.
Narrator:
The Wolf of Franchises is the c e O of Wolf Pack franchising, as well as a creator at Workweek Media. All opinions expressed by the Wolf and podcast guests are solely their own opinions and do not reflect the opinion of Pack Franchising or workweek. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. The Wolf Workweek and Wolf Pack franchising may maintain positions in the franchises discussed on this podcast.
The Wolf of Franchises:
So before we get into Blueprint, I’m curious to learn how you even started it. Cause I know your background is primarily right, kind of tech sales. So yeah. How do you go from tech sales to being like, you know what, I’m going to quit that job and start a cookie franchise.
Adam August:
Yeah, so tech sales, I, but I also sold season tickets for the Miami Dolphins. I ran a Bobby pin manufacturing company in Appleton, Wisconsin. I ran gym operations, so all over the place. And what, looking back on my career, what I take away from all those experiences is that I’m really good at figuring shit out. And ultimately that’s what starting a business is. There is no pun intended blueprint on how to build a business. You kind of just have to learn and adapt and grow and implement those learnings. And I realized that I was really good at that. So I got to a point in my life where I was just, I guess ready, I had the self-belief and the confidence that I could do this. I saw that Insomnia sold for, I think it was like half a billion dollars. And I figured I love eating cookies. A business that scales, I could sell it in the end. I’ll figure out how to get from here to there. And that was kind of the start of the journey. Super
The Wolf of Franchises:
Cool. I didn’t realize that about insomnia either. That’s awesome.
Adam August:
You might have to fact check me on the number, but it was like some crazy number.
The Wolf of Franchises:
Yeah, I’m sure it was a big number. It seems reasonable to be honest. All right. Well, so I guess before we kind of dive into the origin story a little more, I’ve just out of curiosity, what’s been your favorite business that you’ve run so far? And it sounds like you’ve run the gamut on a bunch of different businesses.
Adam August:
I’m loving what I’m doing now with Blueprint. It’s awesome. I also am a founder in a real estate development company that’s also really exciting. And I’m, my four partners are my four best friends. So that’s been really special to be building a company with your best friends. But I love building cultures, I love empowering people. I love seeing people grow. So I mean, I guess to answer your question, what has been my favorite business? I would have to say Blueprint
The Wolf of Franchises:
<laugh>. Okay. Good answer for the press there. So when did you found Blueprint? And can you tell me a bit, a little bit about Yeah, just the, let’s say go to market slash early days when it first opened. Because obviously with Covid, I got to imagine there there’s been some tough moments and crazy moments.
Adam August:
So the decision to start a cookie company was made, I want to say the end of November of 2018. Pretty quick text with myself and Nick Hicks, who was my co-founder, also one of my closest friends when he said he was in the next day we’re calling spaces in Fort Lauderdale. Again, have no idea where to start. I didn’t start with a business plan, not a big fan of those. So we just figured, okay, we got to find a space and the rest will unravel and kind of show itself as we take steps forward. So we started looking at spaces, developing the brand a little bit. Came up with a name batch, which was our original name. We’ve since gone through a rebrand and then come probably about February, 2019, Nick and I look at each other. We’re probably at this point, maybe 15 grand in.
We found a space looking at signing a lease and we’re like, okay, it’s probably a good time to figure out what are we going to do with the cookies, right? Because him and I don’t bake. So that was never going to be part of the equation. And we first met with one of his friend’s moms and she made some cookies and we realized, okay, that’s probably not going to work. And at that point I went on LinkedIn, kind of created a prospect list of pastry chefs in the area, put together a simple message about, hey, starting this business, looking for a partner to give equity to, don’t necessarily have to invest any money, are you interested? And out of the 15 that I sent, we got one response and that was Chef Max Santiago, which now upon reflection was probably if you lined up everyone in front of me and said Pick one, he would be the guy that I would pick.
So that really allowed the cookies to really come to life and all the credit to him for the product that we have. Then I think maybe we did the development then into construction, self-managed myself, no construction experience. So that was incredible. Literally sitting on the job site every single day at a beach chair watching them work. That was me for three months. Nice calling my own inspections. And then August 31st, 2019, we had our soft opening. I had no idea what to expect. I just always believed it would work out. Come to find out, you open up the door and we had a line down the block. Holy crap. Which was incredible. And the only reason why is because of Max. Max is very well known down here. He was the founding pastry chef of Salty Donut, which is a very popular donut concept in Miami. And it was his name in the notion that Max is opening up a cookie shop. That’s what drove people and I think propelled us early on.
The Wolf of Franchises:
Yeah, that’s fascinating. To go from idea in October, November, 2018 to literally doors open in by August, 2019. That’s no joke.
Adam August:
That’s how we do it.
The Wolf of Franchises:
Yeah, let’s like walk through just your, some people might hear that and think, this guy’s crazy. And obviously it’s working though. You’ve pulled it off, you’re open, you’re operating now, you’re franchising. So clearly things are going well enough. But what are the kinds of things that you are doing, especially not, you’re not a chef, as you said. Have you even operated a brick and mortar business? Do you just have this belief that even if you haven’t done something, that you’re just going to figure it out? Cause how do you go from not even being remotely in the cookie business to just opening it and having a line down the street within whatever that is, eight, nine months?
Adam August:
Yeah, I mean definitely it starts with a belief in myself, but it’s not just a belief in myself that I can do it. I have my superpower, if you will, is that for however I’m able to do it, I’m able to attract the right people at the right time. So I have surrounded myself with incredibly talented, bright, experienced, driven people that obviously see something in me and I see something in them. And I’ve built a team and I’ve acquired partners, business partners through this process. It started obviously with Nick, right? Then we added Max because we need someone to do the cookies. I met a gentleman named Mike McGowen along the way. Now our COO and an equity partner along with him came Paloma, who is our CMO and Chief Branding officer. She’s an equity partner. And most recently with the whole franchising piece we brought on Joe, who I know very well, it’s a belief in myself, but also, again, for whatever reason, I’m really good at building a team. And ultimately to do what we want to do, we have to have a really good team. And although we are only at three locations and just getting into the franchising world now I look at the people that I have around me and that’s what gives me the confidence that eventually we’ll be in the discussion with the crumbles of the world.
The Wolf of Franchises:
Well, alright, so you launch lines at the door, were you in the store
Adam August:
Every
The Wolf of Franchises:
Day? Is this Chef Max?
Adam August:
Yeah, chef Max.
The Wolf of Franchises:
Is he in the store too or is he just giving you guys the recipes and he is like, Hey guys, I’m not cooking. You have to cook, but I’ll give you the amazing recipe for quality cookies.
Adam August:
So every day in the beginning, max was in there. Okay. Nothing happened without Max because we didn’t have process. There was no systems, there was no, how many dough are we making? How much does each dough yield,
The Wolf of Franchises:
What equipment to use to cook these things? Right. Well,
Adam August:
He gave us guidance on that. So we had the mixer in the oven, and that’s the great thing about the cookie business. It’s from an equipment standpoint, it’s pretty simple. But yeah, there was no systems, no processes. Everyone was just kind of figuring it out. And I was relying on Max for the operational piece. I learned that’s not his strength, so to speak, but that’s just kind of where we were at the time. We truly were literally a startup. So you figure it out, and I was probably in the store 5, 6, 7 days a week for about a year and a half. And over that time, we get better. You start to build systems, you put out version 1.0 of how we mix in the morning and what’s that processed. And then we learned from that and then put out two point, and then we started having training documents and inventory management. All these things evolve over time, but we didn’t have any of that in the beginning.
The Wolf of Franchises:
Yeah,
Adam August:
It was just figure it out.
The Wolf of Franchises:
Well, so how long was it before you went from location number one to location number two? And they’re, are they all in Florida or are they Yeah, so
Adam August:
All three of our locations, we have one in Fort Lauderdale, downtown Fort Lauderdale. Plantation was our store number two. And then Boca was store number three. Plantation. We opened in July of 2021. And then we opened Boca of August of 2022. And we just took the net operating profits from one and rolled that into two. And then we took the net operating profits from one to two, rolled that into three, always had a long-term vision. This is then about putting money in my pocket. This is about building something big
The Wolf of Franchises:
Sick. I mean, it varies by geography for the most part. But on the real estate side, do you happen to require loans or are you able to do this all in all cash for where you guys are based? All
Adam August:
Cash. We don’t have any loans, although I will be looking at going that strategy for future corporate growth because I think at this point there’s no need to continue to put our own money in. We have a proven concept, but a combination of cash. And then also with every entity we get a credit card and we do it with Chase, so there’s 0% interest. So we max that credit card out, basically borrow the money for a year and then pay that off. So we’ve definitely found ways to stretch our budget, if you will.
The Wolf of Franchises:
So I’m going to guess based off your kind of just fire from the hip mentality that maybe you weren’t, is
Adam August:
That what it sounds like? Is that how it put
The Wolf of Franchises:
Off? Well, I mean it’s good. You’re action oriented. A lot of people just think about things forever and then they don’t actually do anything with it. But you clearly get shit done. But I’m going to guess that you didn’t necessarily know about Crumble cookies and this whole ecosystem of big franchises that are doing cookie stuff. So when did that idea cross your mind like, Hey, let’s franchise this, and did that change the calculus of Blueprint at all?
Adam August:
From day one, it was always about scaling and getting to a hundred, 200 locations and selling for nine figures was what I always put out, right? I dream big, right? I think you have to. Why not? Exactly. Why not, right? So it was always that, but I never knew how we would get there. I knew that it was important that we built the system and did things the right way. So I have a philosophy of go slow to go fast. So it was really opening up one store, learning that, okay, now let’s open up a second. I build the right team, the infrastructure, our systems open up a third. We really wanted to prove the concept before really trying to blow it up. And through that process it, I’ve gone back and forth 50 times in my head about do we franchise? Do we go corporate? Do we franchise? Do I raise money? Do I like? So, and ultimately you start to see the ecosystem as your word of crumble and dirty dough. There’s so many concepts that it’s like speed is now we have to get to market quicker, right? Than maybe what I originally thought three years ago. So I think that observation is really what made me lean more into, Hey, we really need to go the franchising route because it’s just speed to market at this point.
The Wolf of Franchises:
Yeah, definitely. It does seem to be a lot of cookie concepts. Just I think it’s interesting for you cause you had this idea, and I mean you weren’t too far behind crumble, to be honest, man. They opened up, I think July, 2017.
Adam August:
That sounds right. So
The Wolf of Franchises:
You were only two years after them. And I would say when you’re thinking in October of 2018 about launching a cookie business, I mean, well before Crumbles on the radar, these other brands like a Dirty Dough that’s popping up. And I know there’s this other one chip city that Danny Meyer from Union Square Ventures just, yep.
Adam August:
New York.
The Wolf of Franchises:
Yeah, exactly. So now they’re like, whoa, what’s happening from a market perspective, just a total dressable market. And I ask this just because I have supported crumble to a degree on Twitter primarily just because, and we had the founder on the podcast or the co-founder on the podcast, but a lot of people say, oh, this cookie craze, it’s too much. It’s going to be froyo and cupcakes. And my only pushback has really been like, yeah, I get it. It’s a lot of spaces jumping in. Anyone could, or a lot of companies jumping into the space, but at least with crumble, the unit economics of them are far beyond what any froyo franchise was ever putting up. I just want to get your sense of how do you view the cookie landscape? Are you worried that it’s like that there’s, it’s going to be too crowded and the volume of other competitors and how that can impact your concepts?
Adam August:
I’m definitely not worried. I’m aware, but we’re very focused on what we’re doing and I know what we’re building. We have an amazing product. We have a superstar team. Our approach to team first and how we support our team members, the amount that we’re paying, the culture that we’re building, I think that really differentiates us. And as franchisees do their analysis, that’s going to be something that I think they learn. And like I said, differentiates us from the other cookie companies out there. I do think that there is going to be a similar wave from the cupcake 10 years ago and what happened there, and that there are a lot of concepts, but the cream of the crop is going to rise. I think when it’s all said and done, there’s going to be 3, 4, 5 players, all of different sizes, some national, some maybe just regional, but I’m not worried about that. There has to just be one. And you could see that across pretty much any food industry that there’s multiple players. And for me, I mean, again, I look at crumble and I get excited because they’re validating the market. They do a lot of amazing things that I think inspire other businesses. So if anything, again, I look at them and I say, okay, how can we again, take from that, but keep it in the blueprint model? So that’s been pretty successful so far.
The Wolf of Franchises:
Definitely. No, it’s not a winner. Take all market. It’s very rare for that to ever take place. I can’t even imagine a common reason that I’ve heard, especially when I was in my franchise development days, for people maybe using it as a reason to not buy a concept. It’s like, oh, there’s already a competitor that exists that’s doing something similar. I mean, think about I obviously burgers, especially in America, I mean massive market. So market sizes matter. I’m not saying they don’t matter, but I mean, yes, Wendy’s five guys, burger King, Culvers, shake Shack, shake Shack, what a burger. I mean, we’re not even close to being finished, man. Yeah. So imagine how many people who passed on Burger King or Wendy’s just cause they’re like, oh, McDonald’s already exist and forget the rest of the ones we just nicknamed. So yeah, that’s totally right. And yeah, I think over time what you said, I mean, there’ll be an oversaturation most likely, but the legit concepts and the legit operators will rise to the top. And
Adam August:
I think that’s really important is the operators and who is in this just to try to make a quick buck and who is in this to try to really build a company. And going back to with when we rebranded and settled on the name blueprint for us, we really want to create a blueprint for how companies treat their employees. That’s really what the name blueprint is. It’s also why we went with a name that doesn’t necessarily tie directly into cookies is because we see ourselves as much more than a cookie company. So my vision in five years from now is other food concepts and outside of food, but other food concepts, looking at us and seeing, again, our employee benefits and how we pay and the culture that we’ve created and being inspired by that and not being inspired by our cookie flavors,
The Wolf of Franchises:
Which are made by a world renowned chef, it sounds like. But
Adam August:
Yeah, well now they’re made by, we have an amazing team in all of our stores that produces, max is not, now, max is much more just high level recipes. But so that’s talking to tie in blueprint and what that all means and really what our vision is for our business.
The Wolf of Franchises:
Yeah. Well, you want to share I’m curious to learn more about that. How are you envisioning or and already doing at your corporate stores things differently than maybe the rest of the quick service food industry? Yeah, I think that’s a good starting point.
Adam August:
So I think it first starts by pay. I hear people all the time mentioning or talking about how difficult it is to find good employees and people that care. And then the first question I always ask is, well, how much are you paying them? And they often will say, 8, 10, 12 bucks. And I just feel like if you want someone to care about what they’re doing, the pay needs to show that ultimately, compensation, in my opinion, is a company’s way of showing appreciation for its team members. And I think there’s too many companies out there that are missing the boat on that. So on average, our employees with tips make $21 an hour, which has allowed us to really get quality people who care about the company, who care about our philosophy on hospitality first. And it kind of starts there. So if the company is showing appreciation and care and love for the team members, then that feeling just naturally rolls into the guest experience and is, you know, mentioned Danny Meyer earlier, he’s a huge inspiration of ours for how we look at hospitality.
Every single one of our team members, when they start, they’re given the book Setting the Table by Danny Meyer. They’re asked to read it over a 45 day period. In doing so, they get a hundred dollars bonus for reading the book, and they get a dollar raise. They also have to answer some questions just to show that they retained the information that we wanted them to retain. And then I meet with every single one of our employees, and I have a one-on-one conversation with them for an hour talking about the book, but also getting to know them. And I think that, you know, what I have learned from those conversations, and at this point now being open for three years, it’s probably close to 75 to a hundred conversations, is so many people are coming into our business with negative past work experiences and just working for companies that really don’t care about them.
And that’s really where we’re setting out to be different. And whether someone’s with us for six months a year, or all the way, I want to create an environment that shows our team members that whether you work here or you go somewhere else, there are companies out there that do care and that treat you well. And that needs to be an expectation that you hold the company accountable for. So I mean, that’s just one of the areas we’re also very big on. A lot of our team members have side businesses, so really big on supporting them and coaching them and trying to give them new skills. So we do amass, ask me anything with multiple, our executive leadership. So we had an AMA a few weeks ago with Paloma, so any of our team members can come on and ask her about marketing ideas or strategies that they can apply to their own business. So we’re really big about, again, trying to empower our team members to have their own thing that they can grow. We’ve already experienced this with I think maybe two of our team members where they left us to go pursue their own entrepreneurial dreams, which to me is, I mean, that is everything. Yeah.
The Wolf of Franchises:
I got to imagine, especially in the industry you’re in for someone to get hired and you give them a book and say, Hey, I’m going to give you a raise and a bonus if you read it and retain it. I mean, that is probably, I’m sure people are like, wait, you’re doing what you want me to, you actually care if I, cause I got to just imagine it’s like, oh, here’s your apron or whatever, and get to work. Yes yes. Yeah. Where’s actually just showing on day one that you know, are trying to invest in them and teach them. So that’s super cool to hear. And yeah, honestly, when you first mentioned the thing about helping your employees with side businesses, part of me is that’s amazing. But then I’m also putting on the business owner hat and I’m like, wait, I don’t want to, a lack of focus as much as you want.
I want everyone to fulfill their potential and do what they’re capable of. But then there’s the business owner’s hat where it’s like, oh, but I can’t have them focusing on that while they’re working for me. It just, it’s got to be outside. But by the time you finish, I’m like, you know what? This is pretty awesome. And it’s probably counterintuitive maybe to some, but I got to Ima Juan, your retention’s probably great because people That’s awesome. Love working for you. And that a lot of things, a lot, and I get this from my past experiences was employers pretend like their employees sometimes don’t have a life outside of their work, which is just acknowledge it, it’s a reality. And rather than try to prevent them from accessing that other part of their life, you might as well just embrace it and help them with it, which it sounds like you’re doing.
Adam August:
Absolutely.
The Wolf of Franchises:
Yeah.
Adam August:
I mean, what that does is it creates happier people, not just employees, but people. If you’re able to balance work, but then also you have the time and the space and the support to do the things that you care about outside of work, and the employer takes interest in those things, that person is going to feel happier. I would actually say they’re more focused at work because they’re 60 hours a week just working and working. And we have seen that this isn’t kind of in theory, this is in practice and we also kind of structure our shifts so that really, we don’t really have team members that are working more than 20 to 25 hours. Our general managers who run the stores are only asked to work in the store only 30 hours a week. You go to any other restaurant concept and ask a general manager, how often are they working? They’re probably going to tell you at least 40 hours. More like 50 to 60.
The Wolf of Franchises:
Yeah. Well, for one, you have happier employees. They’re going to do better work when they’re in there versus the unhappy employees who are just resentful and looking for a way out or just surviving versus thriving. So I got to imagine it’s a better culture, more productive ecosystem of employees, but also the two that you said that left to go on, to start their own thing. I mean, if anything, it’s a great marketing for, and again, I know you’re not doing it for that, but it is good. It’s actually good marketing for you to be like, you can, I’m sure those employees would’ve no problem with you promoting them on your website. And that’s a sell. If I’m a young employee looking and I need a job, it’s like, oh, this company is like they’re paying above average and they’ve helped other employees start their own businesses like that. I’m going to that place versus anti ANZ or whoever else is hiring <laugh>. Like
Adam August:
Yeah, for sure. And I think that, I mean, I don’t think, I know that as we grow and we get better at telling our story outside of just that we have delicious cookies, that this becomes our part of our story and part of our recruiting tactics.
The Wolf of Franchises:
Fascinating. And you guys do though, just for the record, part of the reason you came across my radar is because you guys want some state of Florida award for best cookies in Florida. Is that correct?
Adam August:
Yeah. Tasty Table tasting table, tasty Table. One of their editors did a whole chocolate chip cookie analysis of every cookie in the country. And we won best chocolate chip cookie for the state of Florida. Which is funny because when I first met Max, a pastry chef is an artist and an artist to be creative and out there, and Max is going a million miles a minute about all these different flavors is, and I stopped him. I said, max, I don’t care about any of that. I just want the best chocolate chip cookie. And fast forward three years later, we end up winning best chocolate chip cookie in Florida, which is awesome. And although I am biased, I really do believe that we do have the best chocolate chip cookie in Florida. I would know, I’ve probably at this point have had definitely over 200 chocolate chip cookies. So it’s my go-to flavor.
The Wolf of Franchises:
Yeah, honestly, you’re saying this, I’m thinking I should pivot my newsletter to just review food on franchises. That’s a great excuse to just eat everything you want
Adam August:
And you, I’m sure you will never have to pay anywhere you go
The Wolf of Franchises:
<laugh>. True. All right. Maybe a new segment coming in 2023.
Adam August:
There you go. It’s all the time that you got.
The Wolf of Franchises:
Yeah. Have you thought about, are you applying anything different to the franchisee franchise or relationship? Maybe in the same way that you’ve also clearly rethought, not to be cliche, but the blueprint for employer to employee relationship.
Adam August:
So what I’ve been telling our early franchisees, and I’m excited to share that we already have two each committing to 10 locations. One bought all of Palm Beach County, one bought all of Miami-Dade County. So that’s huge to start with that. What I am telling them and other people that we are speaking to is the same philosophy that we are taking with our team members. It’s the same philosophy we’re going to have with our franchisees. I can’t see as a world in which we treat our people, our employees, our team members one way, and then we take a completely different approach to how we treat franchisees. So I don’t know in terms of what creative approaches we take, because we’re still so new to this, but I’m very hands on right now, especially with our first franchisees. I’m operating as if these are corporate stores. So I am involved with every aspect driving down to go look at locations and on every call. So I don’t know if that’s any different than how other franchise systems operate. I know that as we scale, I can’t obviously maintain that. But I think that as franchising grows, we’ll find ways that we differentiate ourselves and how we work with our franchisees than other franchise systems.
The Wolf of Franchises:
Well, I think at a minimum, I mean, not every franchise will do multi-unit packages like that, some limit, because it’s a quicker way for them. If I only sell you three franchises and then I could sell the guy across town or maybe in the next county, another three pack. And then from a system perspective, you’ll get the six locations quicker than selling one person, theoretically six or 10 or whatever. And then that’s quicker royalty stream and all that stuff. But I think the problems start to develop over time, usually where you get 10, 20, 30 franchisees in the system with maybe a hundred or 200 plus locations. And then as that system just grows, it seems like they find more ways to extract value out of the franchisee base. The classic example than I think of is always Quiznos, who I mean just was selling so many locations and then increased their royalty rate and then they’d offer ridiculous promotions to customers. So sales were going up, but the margins of franchisees were making were negative. And then on top of that, Quiznos was supplying and they mandated franchisees would have to buy all the napkins, all the dough for the bread, all the sauces from Quizno’s affiliate supplier company. So Quizno’s was making more money from just selling napkins and that type of stuff than even off their royalties. So that seems to be when the problems come in,
Adam August:
Which really all you’re describing is greed. And to the people that listen to your podcast, and I know that’s growing a lot every month, who are looking at possibly buying a franchise, that’s really where you need to be comfortable with the operator and the CEO of the company. And that’s one I’m proud of myself that I don’t have that mindset. I’m not looking to squeeze the juice of our franchisees. I know in order for us to be successful, our franchisees have to be successful, period, end of story. And if that means that a franchisee is having a few months stretch and we need to reduce royalties so that it’s working for them, that’s something that we’re going to do. As these situations come up, we will handle it. But I know that that’s how I’ve operated from day one. So why would I change as the business grows, right? And I often find that sometimes people will say, well, when we get to this point, then we’ll start doing this. I don’t agree with that philosophy. Do something the right way from the beginning. Because that’s how you really create culture by doing things from the beginning and building it that way. And that goes, again, in lines with how we’ll handle tough situations with our franchisees. It’s going to be people first.
The Wolf of Franchises:
I love that. I’m pumped to watch the system grow. Cause I’m sure you’ll come up with some cool new ideas for ways you can work with franchisees better than maybe what the industry standard is.
Adam August:
Well, and I would love your insight as well, because who knows more about franchising than you do. So
The Wolf of Franchises:
Thank you, man.
Adam August:
Yeah, as you hear ideas, please shoot ’em my way. I would be happy to try some things out.
The Wolf of Franchises:
Well actually, I, I guess if there’s any franchisors out they’re listening to, my most recent episode is with Jamie Weeks, who, he’s a big Orange theory franchisee, but he also founded his own franchise, and I just had him back on the show for the second time this time from the perspective of him being founder and c e o of, it’s called Sweat House, like a wellness franchise. Yes. Yes. Pretty cool brand. But he goes into a lot of how he’s structuring his agreements with franchisees because he was a multi-unit, or it still is for the most part, like a hundred plus units of Orange Theory. And he’s basically with sweat house fixing what he views as all the common complaints that franchisees have with their franchisor. So definitely a good one to listen to. Moving from that to Blueprint as just a concept, I think would be a good place to wrap up here. Is there a typical, and I know there’s some limits to what you can say from the investment perspective, of course, because of just the FTC law with franchises, but as a concept, can you give just how it works for an operator? When, where is the ideal location open? Is it a massive square footprint needed? How many employees per location, that kind of thing, and maybe even how that differentiates from say, a crumble if you know that.
Adam August:
So the way that we have built our system and the way that we present it to franchisees, which is also why we have commitments of 10 locations, is because we have built a very easy to operate scalable lower labor business model. So our stores typically right now are averaging about $600,000 in revenue a year. We’re definitely looking for that to grow over 2023 as we start to turn on digital advertising, which we’ve done none of really get out in the community and focus on catering, all things that we’ve kind of just bootstrapped. But what that has allowed us to do is we run our stores primarily with one person. Most of the time, about 60% of the time we got one person running the store the rest of the time, maybe we’ll have two. On the rare occasions we’ll have three people. And that really speaks to the system and operations that my coo, Mike McGowan has built.
We are very, very system process oriented. That is definitely where we hang our hat at the end of the night. And what that allows franchisees to do is scale the concept and be able to have 10 stores and not be relegated to have to having to run one. So it all comes down to systems and good people. From a ideal location standpoint, we’re still very much learning what that is. I would’ve question marks if someone is coming on here who has three locations saying that they have it all figured out because that’s just not true. So we’re still very much learning what good locations look like. Our first location in Fort Lauderdale looks very different than our third location in Boca, yet they do similar sales. So those are inputs that we’re taking in and still figuring out where’s the ideal place for us. We have a great real estate team that we work with that is also helping us figure that out. From a build out perspective, it’s very simple, straightforward. We’re looking at ideally 800, 900 square feet. The equipment is pretty straightforward all in. We try to keep the investment below $250,000. Obviously with construction, there’s variables, you don’t know what the space is, but that’s kind of our target range. And ideally we’re looking to have that ROI in that 18 month to 36 month range. Yeah,
The Wolf of Franchises:
No, it’s fantastic.
Adam August:
Did I break any laws? I hope I didn’t.
The Wolf of Franchises:
No, I mean, you covered yourself as variables and obviously folks, Adam would say, just read the F D D. That is where the
Adam August:
Ultimate Yes, read the F d D re, but I’m a very transparent person, so it’s hard for me to ever say, oh, sorry, I can’t answer that when I’m asked the question, just because I’m honest and transparent. But re read our F D D and
The Wolf of Franchises:
Yeah, unfortunately sometimes that law, the law was put in place so that people weren’t getting ripped off, but then it ends up handicapping you because some people are afraid to answer things. So yes. Yeah, yeah, I hear you. That was me on sales calls. I’d be like, Hey, sorry, I really want to tell you, but I’m technically not allowed to. You have to look at it and it feel, it just feels wrong.
Adam August:
It feels wrong. Absolutely. Especially when someone’s looking to invest and some people their life savings in you and you’re telling them that, I can’t tell you like that. Just like you said, it feels wrong.
The Wolf of Franchises:
Yeah. Ultimately as a system grows, you have actual franchisees, they can say anything, which is good. It sounds like you have two big ones that came in. That’s fascinating though, especially on the labor piece. I mean, that’s pretty incredible. You’re able to get to that average unit volume so far of about 600 K off of predominantly one person to store at all times. I was going to guess it’s usually at least two to three minimum for most quick service, dessert, whatever you want to call it, those, that category of franchises. And it’s a much lower investment, it sounds like, than a crumble, which is pushing close to 700 k. I think at the high end of their investment,
Adam August:
I know people become infatuated, and again, I cannot say enough positive things about crumble. And you look at their numbers and 1.52 million, but you get infatuated with those numbers. But if your store is doing 1.5 million, the stress that puts on the operator, yeah, it’s a lot from a crumble store, and I listen to your episode adjacent, and I know them, I follow them. Well they can have 40 team members per location, and an operator has to manage 40 personalities and scheduling and conflict. And we’ve made a conscious decision to scale that back where we’re not looking just to drive, drive revenue, drive revenue. I think there’s a balance with driving revenue and net profitability, but also keeping the operator in mind. And again, we’re looking more for investors that this becomes one of the streams of revenue that they have, that they’re not working in the store. So again, it’s a little bit of a different approach, and I understand that that’s not for everyone, but nothing is for everyone or not. One thing is for everyone.
The Wolf of Franchises:
It’s a super attractive model. And to be able to build out, I mean, if you had 10 locations, theoretically, you can maybe have 20 employees on staff and rotate ’em depending on what stores the hot one of the day. I don’t know. I’m making stuff up in my head, but
Adam August:
Yeah, you probably wouldn’t want to do that, but no. Yeah, I mean, 10 locations are going to, it’s going to be spread over a big geographic area if you have a five. Yeah. But again, 10 locations for a blueprint. Maybe you have, let’s call it 80 team members, 10 locations for crumble. You’re at 400 team members. So five x, and again, one is not better than the other, but there are different strokes for different folks. Whatever you’re, there’s this, it’s for a different type of investor than a crumble, in my opinion.
The Wolf of Franchises:
Completely agree. So that’s a really important thing to think about for folks is big numbers are fun, but it does come at a cost, so to speak, of you got to support those numbers, which for the owner slash operator dead, I mean, they’re the ones who have to hire the employees schedules, figure out the systems to support that madness. So some people might be definitely more attracted to couple employees per location, and you’re still making a healthy margin and it comes with a much less headache.
Adam August:
And I mean, really at the end of the day, if we can consistently show as we scale that our ROI is around that 24 month mark, you’re making your money back in 24 months and your straight profit after that, what, from an investor, really? What more could you want?
The Wolf of Franchises:
Yeah, no, I mean just if people are not buying that, I mean, for the last 16 months, I’ve basically been researching STDs for a living and writing about it in my newsletter. And if you can make the top franchises are showing the potential to earn your investment back within three years, if you beat that cutoff at three years, you’re doing great. You’re above average. Yes. So yeah, I think a lot of people don’t realize that brick and mortar businesses just, it costs an investment and usually takes time to earn it back. And three years is actually pretty quick. And there are some doing less than that, and that’s also fantastic. But yeah, so I think your head’s in the right spot and yeah, man, I’m super pumped to watch you grow.
Adam August:
Yeah, likewise, man. And again, I appreciate you’ve given me a lot of insight off camera, so it, it’s been cool to see what you’re doing in this space, right? Because as franchising, which I think has historically kind of been run by older people, hopefully I don’t offend anyone when saying that, right? I think there’s this, it’s definitely a way that’s coming and people like yourself are thought leaders in the space. So I appreciate just, you know, being on your show and getting to chat with you and build a relationship with you.
The Wolf of Franchises:
Definitely, man. Yeah, likewise, completely. Well wrapping up here is there anywhere online where people can follow along your journey or the brand’s journey and just see what’s going on?
Adam August:
Yeah, we’re on all the social medias. Facebook, Instagram, TikTok at Blueprint Cookie, and then our website is blueprint cookie.com. So you can check out all the updates, always coming out with new flavors. We have an incredible Instagram run by Paloma and Gabby, shout out to them. They do an incredible job. So yeah, you can definitely keep tabs on us over there. And I apologize in advance for any drooling that happens while looking at our social media
The Wolf of Franchises:
<laugh>. All right. You’ve all been warned. We’ll you’ve all been warned. We’ll plug those handles in the show notes though, folks, so you can check ’em out. Adam, thanks again man. It was a lot of fun talking to you, and we’ll be in touch soon.
Adam August:
Thank you, buddy. Appreciate ’em, man.
The Wolf of Franchises:
Thanks for listening to Franchise Empires. We’re coming to you soon with actionable insights to take the next step on your franchise journey. So make sure to subscribe on Apple, Spotify, Google, or wherever you listen.