Speaker 1: Right now, I am hypersensitive, and I know you love
using AI, and I don't blame you.
Speaker 2: I think it is a remarkable tool.
Speaker 1: However, it is going to be the single greatest disruptor
of a lot of businesses, like accounting, like legal debt. Absolutely,
all these folks hiring all these third world country call centers,
all these folks are done.
Speaker 3: They just don't know it yet.
Speaker 4: You are listening to Carrie Letz's Financial Survival Network, where
you get valuable information you just can't find anywhere else
to thrive in today's trying times. You need the Financial
Survival Network now more than ever. Go to Financial Survivalnetwork
dot com and get your free newsletter and gift. Financial
Survival Network now more than ever.
Speaker 3: And welcome.
Speaker 5: You are listening to and watching the Financial Survival Network.
Speaker 3: I'm your host, Carrie Letz. Well, if you thought about brand.
Speaker 5: Lizing, if you thought about you're tired of working for
a corporation, you want to go go out and do
it on your own, then you want to hear from
my next guest. His name is Cliff Nnnenmacher. Hope I
got that right, Cliff.
Speaker 3: Now though, now, now, hey, that's good.
Speaker 5: Usually I asked first, but I forgot because we were
so engrossed in what you were doing. So you had
a career basically working for Morgan Stanley and investments, and
something happened in two thousand and three and you just
said no, mos tell us, tell us about your journey.
Speaker 2: So that I appreciate it and thank you for having
me on the show.
Speaker 3: I appreciate. I like listening in.
Speaker 2: So going back, I've been an entrepreneur most of my life.
Speaker 1: I was I've been an entrepreneur at a very young
age by mainly small businesses things that I've created, whether
it be food delivery or water sports, parasol boats, all
that type of stuff. And then I was making money
at a young age and I bought a satellite trading
system and I started trading stocks. I fell in love
with the concept, took my portfolio to Wall Street and
got jobs from all member firms, and I ended up
taking a position with At the time, it was Solomon
Solomon Smith Barney, as you know is now Logan Stanley.
So I was with a team we were managing back
in the Asian contagion. I know you're a very astute
with financial market, so I'm going back a while y
two k Asia Gatasian, I was manager on two hndred
and fifty million. I was with a group. It was
called Comprehensive Wealth Management, and I had one of those
bad boss moments and I really always wanted to go
back out on my own. I love financial services, don't
get me wrong, I love it. But I realized that
I think I might want to go back out on
my own. Had a bad boss moment. He made a
silly decision, in my opinion, I asked for a printer.
This is not a big deal. I asked for a
printer to be on my side of the building. There's
about fifty brokers. We were all share in one printer,
one leg smart network printer. Who's absurd? Yeah, sorry about that?
Yeah problem? So yeah, go ahead. Do you need to
tune something?
Speaker 5: No, No, that's okay, go ahead, I'll just make a
note here, will edit accordingly.
Speaker 3: Don't worry about it. Sorry, no problem. That was fun.
Speaker 1: So we had this one printer networked with fifty brokers.
Every time I'd walk across the building and get my stuff,
it was gone. So I asked them for a printer. Said,
if you want one, get one yourself.
Speaker 3: So I did.
Speaker 2: The printer was two hundred and fifty dollars.
Speaker 1: I figured out how to refill and re manufacture a
used empty toner cartridge and I actually started looking into
it and I found a company in Australia that reverse
engineered the toner, the inks I am agenta yellow right,
all of them, and the chips, even the secret handshake
chips at chip Resetters.
Speaker 3: And I bought. I'm I'm like, you know what, I'm
going to buy.
Speaker 1: This company from Australia, and I'm going to scale it
in the entire state of New York and Connecticut. And
that's what I did. I ended up leaving financial services.
That was my entrance into franchising. I scaled thirty six units,
sold it, moved to Florida with my wife, Nicole, and
my business partner and I justin came down here and
we started buying other small businesses, and we mainly bought failure.
We looked for blood in the street, like Warren Buffett says,
if you're not going to kick them when they're down,
when do you kick them?
Speaker 3: Right?
Speaker 1: So we ended up looking for failure. We would pay
the failed business, let's say, ten cents on the dollar,
immediately implement the franchise methodology, turn it around profitability, and
then sell it for a nosebleed multiple and do it
again and again and again. And we did it and
obviously generated millions of dollars in profits, and we created
a insulting company. From that came this revelation that most
people you know this better than anyone. Most people lack
investment discipline. They have no restrict adherence to anything, They
have no real due diligence process. They are highly emotional,
they're irrational, illogical, and they end up investing in things
they know nothing about. When it goes down, may sell
it and panic and lose money they never viewed as
a sale and buy more. If you think about the
average investor in the way they behave and why most
people are not wealthy, that attitude is in small business
and we basically found opportunities by buying those family businesses
and then growing them and selling them.
Speaker 6: You still buying small businesses now at this point, now
we invest in the franchise, or so we make investments
in the franchise concept.
Speaker 1: We try and find brands that are in that embryonic
phase where we could get a lot of value or
a significant percentage of ownership in the brand.
Speaker 3: We'll do that.
Speaker 1: But our core competency is our franchise consulting company called Frenocity,
and we help investors navigate this very daunting process and
help them identify what should I buy, what franchise should
I purchase, what should I invest in? What should I
be doing in this next phase of my life. Most
people just hate corporate America. I've been doing this twenty years.
I've never heard more hatred for corporate America than I
do today. And I think vaccine mandates and just culture
and DEI and all this.
Speaker 3: I'll call it horseshit. You could edit it if you want.
I thank you. We're a family show.
Speaker 5: But I just cursed for this second time in fourteen
years on my prior interviews, So don't worry about it.
Speaker 3: All right.
Speaker 2: It's just like it's nonsense. It's absolute nonsense. Thankfully, it's dying,
which it should.
Speaker 3: Coin.
Speaker 2: DEI is death to every industry.
Speaker 1: It's the kiss of death, and you're starting to see
it now, so thankfully that's starting to fall apart.
Speaker 2: But I think a lot of people just tired of it.
Speaker 6: I thought DEI stood for didn't earn it, didn't That's
my fave too. I love that one.
Speaker 3: Yeah, they didn't earn it.
Speaker 1: It's yeah, it's just based on nonsense. There's really no metric. Yeah,
it's not a merit system.
Speaker 5: Well, you know one thing though, I always like to
see a DEI pilot when I got on the airplane,
you know, because it just makes me feel good about
my country and myself.
Speaker 3: Right, it's right. I always look in the cockpit. It's
so true.
Speaker 2: That's the one area that I want to know.
Speaker 1: It's like, it's like this guy asked me years ago,
back when I was in financial service. He goes, does
it really you talk about expense ratios? One percent, two percent?
Does it really matter? And I said, I have two
parachutes in my hands. One of them has a ninety
seven percent success rate and the other one has a
ninety eight percent success rate. Which one are you going with?
It's only one percent?
Speaker 7: He's like ninety eight Of course, of course, why would
anyone shoot exactly, why would anyone choose a parachute that
has less reliability than the other one. So it's like,
percentages do matter, right, these things do matter? This whole
who's up in the cockpit. Where did you graduate? How
many flight hours? It all matters.
Speaker 5: Oh yeah, yeah, it's so true, and it seems it
should be self evident, but not the purpose of us
talking together. But really it fits in will right. It
is very relevant that you got to have the right training,
and because you have to acknowledge your failings, you know
you don't have the discipline that you should because you
weren't trained to have it, So you better get it right.
Speaker 3: That's right.
Speaker 2: Look at Sully.
Speaker 1: Look at this guy that land I mean, come on,
this guy is like a rock star landing this plane
in the US, and it's just remarkable what he's done.
I'm afraid that the lion's share of pilots could not
achieve that water landing.
Speaker 2: I'm sorry, I don't I don't.
Speaker 3: Yeah, I agree with you. I don't buy it, Carrie.
Speaker 5: Hey, I have a friend who's a pilot for major
airline for forty five years, and you know, they just
don't make them like that anymore. Although you know the
art evolves in business too. Right, you want the Sully
to teach you what to do. I don't want the
guy who basically Sully fired, that's right.
Speaker 1: Right, I want someone with battle scars. I like older doctors.
I take all that stuff I like. Yeah, I like experience,
and this is why people are trying to erase our
past so they can control our future.
Speaker 2: I don't go for it. I want to learn from that.
Speaker 3: Yeah it is. I think I's over now, but I'm
with you.
Speaker 5: Yeah, you know that old joke, what do you call
the guy who graduated last in his class in medical school?
Speaker 2: The best doctor?
Speaker 3: Doctor? Right? Doctor?
Speaker 1: Right?
Speaker 3: So true? So you know, like you want to go
to the best.
Speaker 5: So when you're looking at a franchise, okay, you get
in on them early.
Speaker 3: What do you look for?
Speaker 5: And what should a franchise e someone who's looking to
buy a franchise, what should you look for?
Speaker 3: Yeah, that's it, that's great.
Speaker 1: Now, most people don't ask that those specific questions. When
I'm looking at a brand, I'm starting with proof of concept.
Speaker 2: How many locations do you have?
Speaker 3: Two?
Speaker 1: You have proven nothing, even though that location might be
doing a million. And let's say you know some area
of California with average household income of two point fifty,
you haven't proven that that concept can work well in Austin,
Texas or Tampa, Florida. So I really don't have proof
of concept with a small number of units operating in
a very specific geographic market. I then look at the founders.
I look at the executive team. I look at their
ability to support the franchisees. I look at the FDD,
the franchise Disclosure Document. I'm looking for background lawsuits, bankruptcies.
I'm looking for failure rate. I'm looking for the growth
of the model. And I'm looking at the financials of
the franchise or, which must be audited and included as
an exhibit in the FDD every single year that they
make their offering.
Speaker 2: So I'm looking at a multitude of things.
Speaker 1: Enfranchising support, support, support, proof of concept, the ability to
scale it in any market is important to me. But
then I have to match it up with the investor.
Who's the investor. The investors' high net worth will define that.
Let's just say they have a net worth of a
million and they're an engineer. I don't want to put
them in a sales organization unless they have more capital
to hire the skill sets that they don't have, which
is a big issue in franchising. People get attracted to
business says they don't belong in and That's how I
created wealth in the beginning, buying the failure you didn't
belong here, That's how we created fernocity. They bought businesses
they never belonged in to begin with, and because they
lacked discipline, they weren't really matching themselves with the right
brand or culture, and they didn't execute properly.
Speaker 5: All right, So if I'm looking for a business, now,
what are the best areas? Do you think franchises?
Speaker 3: Right now?
Speaker 1: I am hyper sensitive and I know you love using AI,
and I don't blame you.
Speaker 2: I think it is a remarkable tool.
Speaker 1: However, it is going to be the single greatest disruptor
of a lot of businesses, like accounting, like legal. Absolutely,
all these folks hiring all these third world country call centers,
all these folks are done.
Speaker 2: They just don't know it yet. So I am old
they're gone.
Speaker 1: Oh they're going to be. They're not gone yet, but
they'll be one of the first to go. The systems,
the AI systems are so intuitive now they could route
calls and they could do basic tech support, basic answering.
I mean, look, look what you and I are able
to do right now on the fly. You could ask
me nearly any question, I'll have an answer to you
pretty quickly. It's remarkable. So when you ask me, yeah,
when you ask me that question, I'm looking for businesses
that are basically AI proof, and they're Amazon proof, They're
tried and true, and the services are performed locally. So
I love all things home services, non brick and mortar
home service brands, because I believe that people who can
use their hands and tools are going to be the
most protected asset class in a world of AI.
Speaker 2: I believe that those but absolutely I do believe that.
Speaker 1: I think that your average plumber is going to have
the income of today's attorney.
Speaker 3: If you're not.
Speaker 1: If you're a trial attorney, you'll be okay because again,
your feet on the street in the courtroom, if you're
a desk attorney doing basic evictions and basic legal work,
your toes. I use AI for free to evict a
tenant in the state of Florida. It gave me step
by step instructions. I didn't even need a lawyer, and
the guy was gone.
Speaker 5: I gotta tell you a funny story about a This
is when I learned started learning the power of it.
Speaker 3: Cliff.
Speaker 5: So I used to pay somebody to write show notes
to all my podcasts because you know, it's time consuming.
It was a job I really did not enjoy. And
you know, then they came out with these note takers
for Zoom and it would basically build a transcript of
your conversation and it would summarize it. So I was
using that and then I said, wow, if I combine
it with chat GPT, what would happen then? And let
me tell you, Like, basically I let that person go.
I felt really bad because she was a very talented individual.
Speaker 3: She was amazing. But you know, money is money, and
you know you got to you know, you're always.
Speaker 5: Looking at control costs, right, so so I know exactly
what you're talking about here.
Speaker 2: We're doing it right now.
Speaker 1: Yeah, like right now where the transcript is being created
by AI as we speak every this machine is hanging
on our every word and we'll transcript this entire episode.
I mean, come on, we I agree with you. We
were paying a guy at John. I love you, I
think you're phenomenal. Just like Kerry said, we love the
people we work with an employee, but at the end
of the day, we're running a business. We were paying
John around fifty thousand dollars a year to be a
creative writer. Well, guess who is more creative than John
chat gptgpt right.
Speaker 5: The most creative ever. And I've just written a book
I've used the AI. The books is based on a
series of interviews with this gentleman named Martin Armstrong, Leading
Economists in the world, leading forecaster, and I had fourteen
years of recorded audio with him, and you know it
was it would have been impossible to do it any
other way, but I summarized them and then I used
it to summarize right, and that was that so amazing stuff.
Speaker 3: It really is so in my world.
Speaker 1: I want to embrace it for productivity and of course
cost savings. I'm but as I'm advising clients, I want
them to be invested in businesses that will not be
disrupted by AI. I mean liberty tax. I think like
liberty tax, H and ur Doc I think they're toast.
Speaker 6: I Kerry, I believe they're dead. Yeah, I know, yeah,
I think done even a question. No, I couldn't agree
with you more. You know Handyman franchise, though there's a
shortage of Handyman, so we wanted to create something called
Handyman University.
Speaker 3: You know that you're exactly right. I want to be
so one.
Speaker 1: I have four themes that I like in business enfranchising
right now that I think have let's say, a ten
to twenty year runway before really being disrupted. The first
one I like is I believe that we have feminized
men in America. When I say that, totally okay, preach
into the choir here more. Yeah, the audience. Some people
get offended, and that's fine. There are things that I
believe it and I say it. So I believe that
we have feminized them, not only with the foods they eat,
lowering their testosterone levels, lowering their sperm count.
Speaker 3: Boy, what right, right there you go? You said it?
Speaker 1: So with that, in addition, excuse me, In addition into that,
we've also, as dads, not taught our children how to
use their hands, how to be independent. Fire at Bengo
absolute light switch. First thing I did with my son.
He got his car driveway, jacked it up, took all
four tires off, put them all back on again, right
and then and then he actually needed it. He's sixteen.
He actually needed to remove a tire because he had
hit a curb and got a flat and it was
like that, I can't believe it, Like we just did
this and the average person, to your point, doesn't even
know how to do that. So I do believe that
people could use their hands, people who can be a
handy man. People could do basic drywall work or plumbing
or electrical or roofing or sighting a window replacement in flooring.
Speaker 2: I believe that these people will be in high demand.
Speaker 1: I believe that we have shit on the trades for
so long that we have created this, this gap, this
major deficiency, right absence of people could use tools because
we told them all to go to college to study
things that they really don't want to study about and
go into debt for one hundred and fifty grand.
Speaker 5: Pubdactory in English history, you know, and gender studies, right
fender studies and humanist studies. So so how do you
learn how to become a handymanned?
Speaker 2: Yeah, I mean what? So we had we have a
podcast as well.
Speaker 1: It's called Pursuit of Profit in the guys, it's all
franchised discussions. It's nothing like your show. Your show is
very unique. So when you talk about that, we had
a guy in the show and say, hey, how are
you scaling your HVAC company? He ended up buying an
HVAC company for four million and scaled it to three
hundred and fifty million. How he went straight to the schools,
went after the guidance counselors who were the kids that
you know are not going to college. I want to
train him. I want to give him a skill set.
I want to have them monetize a skill for the
remainder of their life.
Speaker 2: Want them to work for me. And that's what he did.
Speaker 1: He created little little schools and four states where he
operated his HVAC company, recruited him straight out of high school,
gave him a skill set.
Speaker 2: So right now it's all about mentoring.
Speaker 1: It's it's like Mike rowe stop insulting the trades, right stop.
We have to stop that nonsense where we've made fun
of people who said, I'm not going to college, I'm
going to vocational school, I'm going to trade school.
Speaker 2: I want to be a journeyman. Like, we have to
stop that.
Speaker 1: Not we need these people driving over bridge exist. I
know it exists. I mean it's crazy to me, so
I think that I think that after and you know
what I'm talking about, All these presidents of the Ivy
League schools testified in congress. Each one looked like an idiot,
one after the other after the other, look like a show.
Speaker 3: To run a hot dog stand.
Speaker 5: Those more absolutely, they were disgusting their.
Speaker 1: Antswer, We're disgusting. Their view of the world is running
the out book. Yes, yes, I completely agree. I was
completely disillusioned. I said, how the heck did she get
to run the U OFP and mit, you know and like.
Speaker 3: All this crap.
Speaker 5: I mean, I just I know, we believe it, Cliff,
I mean I was in shock. So let's get back
to our topic. Befre here. So physical trades, guys who
do tile, guys, kitchens, redo kitchens, bathrooms.
Speaker 3: What else. Yeah, you're not going to hook to fix
cars soon.
Speaker 1: No food, So you don't hear me pushing food. I'm
not pushing fitness. I like four categories. Number one, use
your hands. Men's health. There's a war on men. I
talked about it. Sperm count for Western male down fifty
percent in last decade.
Speaker 3: That is by design.
Speaker 1: As you introduce socialism, you introduce low t right, it's
it's all coordinated.
Speaker 3: Second can making me now?
Speaker 1: Second category is so the humanization of pets and animals.
Speaker 2: We humanize them. We're not repopulating.
Speaker 1: We humanize pets in what way?
Speaker 3: Like talk to me. I mean it's like, how do
you like your pets? Not your dog?
Speaker 5: Isn't You might love them the pieces, but it's not
a substitute for a person, right.
Speaker 3: Oh right?
Speaker 1: That part is the illness part, right, Dressing them up
and calling them your furry baby and not being able
to function in society without petting your cat, dog or alligator.
Speaker 3: This is where it's.
Speaker 1: Now becoming a mental illness or a human being running
around thinking they're a cat or a fox is.
Speaker 3: Let's be clear here.
Speaker 5: We're not saying is anything wrong with having pets. We
love pets, you and me both. I could tell you're
a dog guy, but it's not a substitute for human interaction,
which it's been positive Pushkaz, right totally.
Speaker 1: We humanize them, and you're exactly right. So I'm only
saying I'm not talking about the humanization. I'm saying, as
an investment thesis, the humanization of pets and animals is
a huge opportunity for boarding, training, grooming, retail anything involving
these animals where you capitalize off of it. My third
category is the agent graying of America. Where we're not repopulating,
there's a lot of work to do, whether it's mobility,
whether it's assisted living, whether it's a real estate play,
whether it's a state sales and auctions or a state planning.
Franchising offers a lot of avenues to deal with the
elderly and not just care for elderly. You could do
a lot of just mobility. I have brands that deal
with scooters, wheelchairs, striker beds, chair lifts and stare lifts
and all that stuff. And my fourth category that I
like is everything around biohacking, which is becoming a huge
move right now. I mean, I have lymphatic drainage brands
that do over a million a year on average revenue.
We have testosterone therapy brands that do over a million
a year in revenue, which ties back to the number
one category that we discuss. So there's a lot in
the biohacking space, whether it be peptides or nacs or
just you know, wanting to focus on things other than
just cardio and strength training, to get balanced, to get centered,
and to get healthier. So and beauty and vanity. So
I put that all into category four biohacking, beauty, vanity
to the desire to feel youthful, the desire to feel whatever,
beautiful or sexy, whatever you're looking to be.
Speaker 3: That's right.
Speaker 2: Those are my four categories.
Speaker 1: And I believe that clients that work with us, my
business partner, Justin and I in those categories end up
seeing clarity and realize I'm Ai proof, I'm Amazon proof.
What we're talking about cannot be done through Amazon or Temo.
Temo is becoming popular now taking.
Speaker 5: Care from scam. Temo is a total data mining scam Chinese.
That's what I'm hearing. Yeah, not a fan of Timo,
but uh and I bought some stuff from them. It's
they make their thing addictive. It's kind of like Amazon,
but it's like Amazon on the cheap. It's like right,
So all right, well, Cliff, So to sum it up,
your average client, what's their age demos?
Speaker 1: Yeah, well, we're seeing younger people, but I think the
average is going to be like forties and fifties. They
have a little of that money put aside. They have
they have the liquidity, they have the ability to say
I quit, or they have the ability to keep their
job and enough skill set and bandwidth to run a
business on the side by managing the manager. Average networth
for a client is probably five hundred to seven hundred
and fifty thousand net worth. The average liquidity requirement that
I need is around one hundred hundred and fifty.
Speaker 5: That's almost not that much, really much, yeah, one hundred
Now did they get SBA loans or what do they do?
Speaker 1: That's exactly what we do to bridge the assets will
go to well, do SBA Small Business Administration loans or
on scured lines of credit?
Speaker 5: How much usually cost? I should say how much they
usually have to borrow? What's the total all in cost?
Speaker 1: So in a non brick and mortar brand, your total
investments between one hundred and one hundred and fifty thousand
on average. In a brick and mortar brand, you're starting
investments really three three fifty and up quickly. Right, There's
not a lot at that three three fifty range, but
it does start in there. But to your point, you
quickly could get to a half a million. Yeah and yeah,
And you know, for the folks listening, it's like, well,
how do I buy a half a million dollar brand?
You would put up thirty percent of the size of
the deal. So if you're looking at a five hundred
thousand dollars brick and mortar brand, you would be putting
up one hundred and fifty thousand dollars of your own capital,
and then we would get you an SBA loan for
the balance our underwriter require might be thirty percent cash injection.
Speaker 5: Really interesting. We're definitely going to have you back on.
You're our official franchise expert appointed by the Financial Survival Network. Cliff,
just tell us how do we find you on the web?
How do we connect with you?
Speaker 1: I'm name of the consulting companies for Anocity, so it's
f r A n ocity dot com.
Speaker 5: All right, excellent links in the show notes, this interview
on Financial Survival Network dot com. And while you're there,
we just ask that you sign up for your free newsletter.
Over sixty thousand of you have already and hopefully more.
We're shooting for one hundred. Cliff, really appreciate you coming on.
We'll talk to you again soon.
Speaker 3: Thanks for having me, Carrie, Thanks.
Speaker 4: For listening to Carrie Lets's Financial Survival Network. Your solution
to today's trying time for the latest go to Financial
Survivalnetwork dot com. Financial Survival Network now more than ever