Low Cost to Start Is One Thing. What About the Ongoing Costs? | The Real Franchise – Ep 53

Rhiannon Hello and welcome back to another episode of The Real Franchise, a podcast that goes where others simply won’t, and unfiltered view of franchising, business mindset and everything that we stand for when it comes to supporting a community of small business owners. Join me, Rhiannon, the CEO for James HomeServices Australia, and Justin, one of our owners, as we unpack it all with no topics off limits today.

Today we’re talking about low cost, and I think that most people realize already, that we are a low cost start up. But Justin, today we’re going beyond that because what we don’t really ever talk about and what a lot of business franchise networks don’t talk about, is actually the operating cost and the ongoing costs. So that’s what we’re talking about today.

And that’s what this episode is designed to dive into. So before we get into the detail of the ongoing. So anybody that has landed here pretty new and fresh to us, can you just in 30s give an overview of what we mean when we say low cost startup because we offer something that no other network is offering. Can you summarize our subscription model just in case there are some really new listeners here?

Justin Yep. So about three years ago, we invented a world first and franchising the subscription model, which has been great because it removes that big barrier to people that upfront cost. And so if you’re approved, after going through the information process and finding out how it all works, if you’re approved, it’s only $1,000 upfront. That’s all it cost plus GST.

So 1100. But you get your GST back. So a thousand upfront that’s your investment. We then go and spend you know probably over 15,000 setting you up with all your gear, signwriting vehicles. We take care of all the paid advertising, give income guarantees. And then after your training when you start your business, the subscription fee is simply $125 a week plus GST.

If we provided all the gear. If you’ve already got the equipment or you’ve paid for the equipment before you start, it’s only 100 a week. So we have two subscription options, 100 or 125 a week. So that’s a low cost entry.

Rhiannon It really is. It’s probably one of the lowest. In fact I think it is a the lowest cost entry on the market, particularly for a service based franchise like ours. You mentioned a couple of things that were included in that, but let’s just actually talk about what is included in that. And really what I want to get to is, okay, so if somebody pays $1,000, what what does that entitle them to?

What do we deliver to them for that thousand dollars. And are there any other costs that they would need to outlay in order to get to day one? And you and I both know there’s a couple of small ones, things like first, I had an insurance, there’s only a couple, but let’s talk about what is included in that thousand dollars that basically we provide to you.

And what are the other little things that people do need to be aware of?

Justin Yeah. So what’s included, I guess, in the kit and what we provide. So after the first information session, the first meeting that they have with us, an individual that’s looking, they’ll get an itemized kit, list a email to them. So every possible thing you need to run that particular service is included. So you know I’ve had three different cleaning businesses with gyms, franchises.

Everything that I used is on that kit list. So everything’s provided there’s also the branding of a vehicle or trailer, whichever they prefer, which is like we’ll spend up to 2500 dollars on those sorts of things. And I can’t stress, I just had this discussion yesterday with someone. The importance of a solid vehicle and weight, something that we’re very different to with our model, is we put the business owner’s name if they want on their car and their mobile number, which is I don’t know of any other franchise that does that.

So all the kits provide we also pay for all the training and that’s really important. You know, you’ve got, there’s two parts to the training. There’s like the learning, the business systems, which is with our business coaches or yourself, if they’re in Victoria, there’s then the practical training where they go and actually work in a business.

And that’s just invaluable to actually see a really good business, how it’s run, the sort of habits and things they need to do in their own businesses, the chemicals, which chemicals to use, where but really importantly, this all that quoting training. So all the training is provided and then you’ve got a business coach working with you on going.

The other big part of our expenditure is in paid advertising. So, you know, our team did that big campaign that really gets things going in the beginning. We set up web pages, we set up Google Pages. We create a whole marketing portfolio. You know, we got a great Sam, a great digital designer that’ll put together all sorts of titles for them to use for their business.

So that’s sort of we’re here, we’re our expenses in the setup.

Rhiannon A couple of other little things that we do that you haven’t mentioned specifically that, I just want to add in for clarity. Uniform. We provide your uniform, your cleaning products or your, you know, your fuels or your sprays, weed sprays, if you’re on lawn and garden care, we provide, an initial amount of those products to get you started.

You’ve mentioned, equipment, and that is a comprehensive list. You are not running out to Bunnings the day after you stop. We provided you half of what you actually need. It’s a very comprehensive list. We also provide promotional collateral to you to get you started. Now, promotional collateral is just a fancy way of saying business cards and brochures.

And those are two cool ways that or two core assets that we give to you. And then we teach you how to use them and leverage them to get customers for your business. But initially, we provide those to you in your kit. So essentially, we train you, we provide all of your equipment, we provide marketing package, we provide your uniforms, your product, as well as your promotional items.

So that’s a big package that gets you started. There are a couple of small things actually. The other thing that we have recently started doing for business owners is actually, registering and paying for the registration of their business name. We didn’t used to do that, but it can be a little bit tricky to get that registration sorted.

So we had we thought, heck, let’s just do it ourselves on your behalf to take something else off of our new business owners plates and we pay for that. So there are a couple of small expenses that the business owner needs to be aware of. In fact, I think there are 3 or 4 we need to think about.

Yes. Do you want to lead off with things like first aid and insurance? And I can explain any gaps.

Justin Right. Yeah. The main, the main other expense so they don’t expense to us is that thousand. But there’s a few other things that have to have in place. The main one is they need to have, public liability insurance in, in our industry they need at least 20 mil of cover. And we don’t mind where they get that insurance from.

As part of the information process, we’ll get, one of the companies that works, does they’ll send them a quote. We’ll get a company to send them a quote, but I recommend people get shop around and get a quote for 20 million public liabilities. So that’s depending on the industry, like lawn and garden care, that’s generally around $700 a year at the moment.

Lawn and garden is around that 11 to 1300, depending which company you go with. They accept payment upfront, obviously, but also most of them do it monthly direct debit if you prefer. So not a huge expense in a business sense. The other expense you’ve got to have. And that’s the other thing you need to have before you start a business in this country.

So this isn’t a James thing. In Australia, under workplace law, every, business place needs to have a first item on site. So given you’re running a business when you’re doing a job, that then is a work site. So you need to have a first aid relevant first aid certificate. So you need to I think that’s a half day, that right.

Rhiannon. half day?

Rhiannon It varies. It varies depending on the provider. There are lots of different providers throughout Australia. It varies between half day and full day, and it varies between around 150 and 250. So again it pays just to do your research. Call a couple of different providers and find the option that suits you best.

Justin Yeah. The other thing you’re going to have to have obviously is a reliable vehicle. That professional looking, we’re very flexible on the vehicle. So I have people every day asking me, or do I have to go out and buy a, you know, a van for my business will not, but it’s made to be decent looking. Well, meantime, you don’t want a vehicle that’s going to break down on you when you’re trying to get to your next job, that sort of thing.

Rhiannon Most people just use a personal vehicle, don’t they? Yeah, exactly. Yeah. In that sense, there’s no added expense. You know, in your personal life, if you’ve bought the vehicle and you have repayments or you’re under a lease for the vehicle, that all continues anyway, whether you buy the business or you don’t buy the business, but you’re now operating your business with your vehicle.

And so those expenses actually can become business expenses, which can be handy when it comes to tax time. Yes. The other thing is that you we provide licensing for the software that will run your business, but you will also need accounting software. Yes. And the licensing for accounting software, you can buy monthly packages depending on I think the base the base package is around, $40 per month.

And it does increase, at the point where you need to be using that package then to employ staff. So if you’re just simply an owner operator, then you may end up simply just paying $40 a month indefinitely. But if you do get to a point where you’re employing staff, that cost may increase. The other thing we need to mention is getting legal advice.

We always recommend that you get legal advice before executing. Frankly, any legal agreement, but especially a franchise agreement. Make sure you’re getting legal advice so that cost is there. And then of course any if you’re going to operate your business as a sole trader, there’s no cost to you in setting up that structure because you are operating your business as you and you are already an entity in the eyes of the law.

If your legal advice or your accounting advice or your business advice guides you to set up a different structure, say, a partnership, a company or a trust structure, there may be costs associated with doing that. And those costs would be your responsibility. But you are in control of your decision as to what structure. And there are structural options that don’t have costs involved.

Justin Yep.

Rhiannon I think that’s it for upfronts.

Justin And that’s up front.

Rhiannon First aid insurance. I’m looking off to the side because I do have a list. I don’t want to miss anything in this video. So we’re going to talk about money. I don’t want to miss out anything. I don’t want anybody to think that we’ve tried to mislead them by not including things. So first aid insurance, subscription to accounting software, legal advice or business or accounting advice, and then any, chosen expenses to set up a structure that says that.

Justin You.

Rhiannon Plus $1,000 and you can start a business.

Justin Yep. And there’s nothing like that on the markets.

Rhiannon And that is like cost as it gets. So let’s advance the conversation. Right. Because that’s like, like that could be a very a very tidy sales pitch. Hey. And so that’s when most franchise networks stop. They come up with the tidy up front package. And they, you know, they package it up lovely. And they put a bow on it and they say, hey, look at this wonderful thing.

We’re going to go deeper today. So let’s talk about ongoing costs, particularly operational costs because I think this is where we really are. I mean obviously we’re different because we do subscription model, but I think we’re all so different because you do not have to have an enormous amount of working capital aside, when you start one of our businesses to pay your ongoing and operational expenses.

So, Justin, can you talk us through some of the really obvious ongoing operational expenses of these businesses? And then again, I’m going to refer to my list and I can see line any gaps. Yeah.

Justin Yeah I this really is the strength I think of our business. You know, you’ve really summed it up well. I think people see that up front thing and I keep hearing, well, this looks awesome. Yes it is, but to me the real strength is the operational costs of our business. And the very basic and most of them are expenses that business owners already have.

You know, you have to have a vehicle willing. You just said most of that goes into their personal vehicle. So they were already going to have their vehicle, right? Yes. It probably got us put a few more K’s on it than what they would have been if they weren’t doing this business. But those expenses are fully tax deductible, as are a business expense.

To run a business in a network, you’re going to have to have internet and a mobile phone. Well, I don’t know too many people in Australia that don’t have internet mobile phones. Yeah. Okay. So but now there are business expense, not just a personal expense. So it’s a big plus, you know, and then talk to your accountant because you know these are home based businesses.

So there’s so many expenses that you already currently have that when you’re running a business like this all of a sudden become a a potentially a tax deduction. And we’re not accountants. So we don’t go into that. But believe me, that’s a huge benefit compared to just working on wages.

Rhiannon Even simple things like buying laundry powder, particularly for our interior cleaning business owners. This is something you’ve probably never thought of before. If you’re listing and you’re thinking about starting a cleaning business, if you’re running it out of home and you’re washing your your cloths every day with your own washing machine, all of a sudden the cost of your washing machine, the cost, if you dryer the cost of your cleaning, you know, you’re you’re washing liquid or your powder or whatever you choose to use, all of a sudden it becomes a business expense.

And so there are so many of those little, little things that people don’t even kind of consider. Yeah.

Justin So there’s so many of the actual costs are costs that the majority of the cost people already have. Yeah. So so what are the extra costs in running a business with us? Well, yes. You’re going to have a franchise fee, right? Every franchise in the world charge the franchise fee a royalty. And we’ve in other episodes talked about that.

And it’s always there’s not hidden fees with James. Right? There’s no late fees. There’s no there’s no other job fees or things like that. We have a straight percentage franchise fee on each club. And then as you mentioned earlier, they said it fee? Oh no, you were talking about, accounting packages. But we at the package we call the butler that you use, they said $24 a week essentially for that, because we have to pay user licenses for every user in our network that’s using that.

So, so that’s this those are the only fees to James. So that’s the one cost. The single biggest cost in this franchise is you, the business owner. What you want to pay yourself. Right. I a common question that people ask me is what what are the costs? You know, the chemical costs and stuff. And I know in my own business that I ran for years and looking across the numbers across the network for a cleaning business, we find generally sort of that between 1 and 2% of your turnover is in those sort of costs for chemicals.

You know, new vacuum bags, those sort of things replacing your brooms and mops and stuff like that, like it’s all that stuff. You know, if you could take one and a half, 2% you’ve got a covered. So it’s not it’s not a massive cost. You’re talking a couple hundred bucks a year.

Rhiannon I think

Justin I think I’ve missed.

Rhiannon Yeah. The other will, the other thing is uniforms. We, we provide uniforms to somebody when they start. But it is our business owners responsibility to replace those uniforms when they get a little bit bedraggled. Or if they need different sizing or, additional pieces to the uniform. But otherwise, the ongoing costs of these business, your vehicle costs, which is your fuel, your insurance, your, your repairs and maintenance, you’ve got all of that already in your personal life.

And yes, those will be a little bit higher, particularly fuel. And maybe repairs and maintenance will be a little bit higher because you’re running your business three vehicle, but you’ve got your bit, you’ve got your vehicle costs. You’ve got, you know, an insurance cost coming in annually or monthly. If you choose to pay it, you’ve got your subscription to your accounting package coming in monthly, your first aid.

You only have to renew every three years. Your business registration is a three year thing, but we pay for that. Your phone and internet, you know, is a monthly thing, but already that’s something that you’re paying for in your normal life. Anyway, you may need to purchase a laptop if you don’t already have one or a computer or a tablet if you don’t already have one.

But again, most people have those things, and there’s nothing to say that you can’t use your personal, existing I.T to in your business. We don’t we don’t require you to go out and purchase, a dedicated business phone or a dedicated business computer. We are entirely comfortable with you using your personal items in your business. There are other franchise networks that would stipulate different, different items.

Alan and God, in case guys, some of them choose to operate a trailer, some of them just work out of the back of their ute, some of them choose to operate a trailer. And so, red Joe insurance repairs and maintenance on a trailer on an ongoing basis and otherwise, uniform products, replacement of products. And the only other thing then is replacement of brochures or business cards.

If the business owner chooses now that’s like 7 or 8 things. Full stop. That’s it. Yeah. And so I want us to compare.

Justin Yeah.

Rhiannon Because that still sounds like a lot to, to probably a lot of people. That still sounds like a lot. So let’s compare this and let’s talk about the costs you don’t have running one of our businesses. Let’s talk about a McDonald’s simply for the sake that McDonald’s is is well known and recognizable, and everybody will understand what we’re talking about.

So this conversation is accessible. What are some of the major costs that you would have as a McDonald’s franchisee that you simply don’t as a service business owner? With us?

Justin It’s huge. I mean, you’ve got the upfront cost on a business like that. You’ve got the lease costs of the building and premises. You’ve got the like. Before I joined Giants, I was a regional manager for a company called Wesfarmers. Right. And we ran. So the same company that owns Bunnings and that sort of stuff. So we ran retail stores.

I looked up from across North Queensland. Over 80% of the costs of my businesses were fixed. Right. And I were big costs.

Rhiannon And I fixed.

Justin Exactly. So fixed means doesn’t matter whether I have a great month or a bad month, most of my costs are set. So if you go through a quiet spell or or something happens in your area, your cost don’t change much, but your income changes hugely. And that’s the challenge with most traditional businesses, like a Maccas for individuals, most of the individuals we work with, right, like to get into.

Before I looked at my my James franchise, I looked at some coffee franchises. And you know, you’re talking three quarters of a million up front. You’re talking the store I was looking at was just under 100,000 a year. Lease costs. Then you start looking at staff costs because you’ve got to have staff because, you know, you’ve got to be open.

From the time that shopping center opened to the time it shuts five and a half days a week. So you’ve got staff in there in a sense that’s fixed. It doesn’t matter how many people come in for coffee or for Macca’s burger or whatever those costs are set. You’ve got to man the store, you got to pay the lease cost, you got to pay your insurance, you got free across.

Oh, we were talking earlier, you know, like I’ve had friends on sunglass stores and shopping centers. And it was, you know, nearly every six months I had to do a refit, you know, a freshen up a new. And it’s huge. You’re talking tens of thousands of dollars every time that happens. And then there’s also.

Rhiannon You direct cost in a business like, like, you know, the Macca’s or, you know, coffee franchise, like what you’re talking about anywhere where you’re selling a product, you’ve got direct costs and direct costs, so fixed costs you were talking about, it takes place. And, you know, some of your, well, some of your marketing costs can be pretty fixed cost maintenance on a website, those sorts of things.

Staffing can be a pretty fixed cost, no matter what. And then you’ve got your direct costs. Direct costs? Essentially can be your inventory costs. So every time you sell a coffee, it’s cost you a particular amount for the milk, for the coffee beans, for the coffee cup, for the chocolate that goes on top to be able to produce that product and, you know, that might be $2 out of the $5 that you sell it for.

And so you’ve got that total, a portion that is a direct cost. And so in a James business, you don’t have any real direct costs. The only direct cost that sometimes our lawn and garden care guys is have is, if they get a job, like laying turf or planting out into the garden bed and, and, you know, they have a direct cost of the turf or the plants or the mulch, but by and large, direct costs, not something that you have on a day to day basis, not.

Justin Significantly less than. And where we do have direct significant costs for example, you just get turf and stuff in our training. We, we try to go as and recommend that they get payment upfront for those items. Yeah. So you know, if you’re doing a big landscaping job and it’s three grain of turf and plants, well you get the customer pay that three grain before you commence the job.

Rhiannon Do you know the other thing that we do that I just thought of that is just it’s it’s blowing my mind. We don’t charge franchise fees on direct costs. Exactly. We have in our software system, we have the ability for our business owners to be able to declare that that was turf or mulch or plants, and when they make that particular declaration in the software franchise, fees are not calculated on that.

You buy a mac is you buy a coffee club, you buy any franchise that is selling a product. And whilst I don’t know what they do right, they might not charge franchise fees on that. But most of those, particularly McDonald’s, I’m very aware that they provide the product to the franchisee. You’re not buying it from a third party supply, you’re buying it from McDonald’s.

And they set the pricing. And so that is another way that they generate a revenue from their business is, is that they sit. And that’s why sometimes franchise fees, the percentage of franchise space can appear a lot smaller for those kinds of large businesses than they do for us. And someone listening might go, well, that’s really counterintuitive for a large business to have a smaller franchise.

They know it’s because they get you elsewhere at the store and they, you know, they have multiple ways that they make money off of their business owners. We have one, you know.

Justin Yes. Correct.

Rhiannon The percentage franchise pay and our $24, weekly ITC. Right. So that’s a really big difference that I only just thought about is that we don’t actually charge franchise fees on direct cost.

Justin Yes. And many years ago, Giants experimented with doing mobile coffee beans. So I had to myself. We ran two mobile coffee vans up here in North Queensland. And same fee structure as we currently have for our other franchises. And when we did our research, we looked at other mobile coffee bands and you know, they all had franchise fees and big upfront cost to buy vans and fit out wallet, but you had to in the other franchises.

You had to buy the clubs and the cups. They really made. Like it was like expensive. It was like $2 a cup because that was a big profit earner for the supplier. And I know some of the fast food chains. I’ve got friends who are in Kane Central and, fast food stores, and they have to buy their supplies from the franchise or at inflated prices.

And, you know, it’s it’s like a second bite of the cherry for the franchise or any James make sure and all our information sessions, Bella and myself make it really clear these are the only fees you’ll ever get from us, right? It’s that set percentage plus set it fee of 24 a week. So it’s there’s no hidden costs or no nice things that are going to bite you.

That’s I find when I’m talking to people random. The, the fear is yes. You’re at a low cost business. So where’s the sting? I had this discussion yesterday on just before this with the guy in Proserpine that’s looking at joining us. You cheap upfront. So where’s the sting. Yeah. And I had to go through and go no no no that’s it.

There’s nothing else. And that way we made we spoke about so in other episodes we have to make sure our franchisees are successful if we’re going to be successful.

Rhiannon Yeah. That’s it. Yeah.

Justin And sorry I’m raving now, but to me, like, this is what brought this episode about. The more I thought about this from my previous work history, managing those sort of retail stores, having friends and family that owned stores in other businesses and networks, the financial investment and risk. What if we had taken on Sonya and I had of taken on that coffee restaurant?

Right. We would have been borrowing half a mil. Plus you had to borrow extra to have a couple hundred thousand capital spare. That’s a massive, you know, if you own an iron home and all that sort of stuff, you’re putting everything on the line, right? And then on going, if things go quiet, if the shopping center you’re in, for example, you know, another shopping center gets built down the road and most people go there and your shopping center dwindles.

What happens? You’re not just not getting the annual fixed cost don’t change. Yeah. It’s it’s it’s scary. And we hear horror stories. And that’s what I love about our business model. It’s a thousand upfront you know. Yes. You’ve got to put your all into it. Yeah. But you can generate similar revenues, similar net revenues from $1,000 upfront investment as you could from putting 750,000 upfront.

Like it’s it’s commercially. I just I really encourage anyone listening, sit down commercially and compare. Yeah. Commercially. Take heart out and just have a good look at the numbers.

Rhiannon Yeah. I think, you know, part of the reason why we’re talking about this today is a conversation you and I had last week, which was, that we have in the last few years, thought that and assumed that our competitors, other franchise networks starting cleaning and lawn mowing businesses. And the realization that we had just last week through a conversation was, I don’t have a minute.

I wonder if people who are looking at the coffee club, who are looking at the retail franchise store, who are looking at the title tools or the the boost Juice. Yes. I wonder if they are realizing that they could also be just as much upside in one of our businesses as what they’re looking at, but without the enormous upfront cost, without the ongoing cost, and without the capital expenditure, which we’re going to talk about specifically in a minute.

You mentioned it a moment ago, but we’re going to go back there. And I think I think if I could get my words out, I think perhaps sometimes people think there’s a bit of a stigma attached to cleaning and lawn mowing businesses as to, well, you just selling your time so you capture what you can earn. And there’s some truth to that, but there’s also some strategy to our system, which starts to take us away from having that ceiling placed on you at $40 an hour.

And so I think that I think as we sort of move into next year, this is something that you and I are going to be talking about a little bit more, and we probably going to start talking about some bigger topics on this podcast just to give people who are thinking about, you know, that standard brick and mortar investment, just to maybe challenge the thinking on that and just offer up a different alternative that doesn’t have the same risk and financial exposure, but could potentially still be returning a healthy amount to somebody who’s prepared to work hard at it and grow it.

Yeah. Let’s go back to capital expenditure. I’m going to explain what that is. And then I just I would love you to just sort of come in and talk about whether that’s something that we, where the business owners in our network need to consider. And I’ll capital expenditure, in a franchise network as the franchise.

So we have the responsibility for making sure that our brand looks on point, that the way that we are presenting our business owners to market is professional, is current, is modern, and is, attractive to potential customers. Think about a McDonald’s store. Now we keep going back to McDonald’s. But again, it’s just it’s so accessible. Everybody’s aware of what McDonald’s is.

If you walk into a McDonald’s store today, it looks very different to what it looked like five years ago, ten years ago, 15 years ago. The buildings look different, the outside looks different, the inside looks different, the menus are different, the seating arrangement is different, the internal fitout is different. The uniforms are different. It’s all different because good franchise networks invest constantly in evolving their brand to meet consumer demands.

And the reality of that evolution, however, is that it is in the best interests of the franchisees and business owners. But it does come at their cost. So if you own a coffee franchise, a fast food franchise, a retail franchise, and the franchise all says guys, super exciting 2026, we are completely overhauling the brand. We’ve been working on this for six months already.

We are really came so excited to be new signage, new branding, new letterheads, new tables, new, you know, cool flights. Everything’s going to be new. The business owner has to pay for that out of their own pocket. So just in in our network, do our business owners need to consider having a certain amount set aside for this capital expenditure?

Do we ever swoop in and say, guys, we need everybody to spend 10 to $100,000 completely rebranding their business?

Justin The simple answer is no, we never have. Right? That being said, I would strongly recommend everyone that has a business to put aside whatever it is in their business to keep, like you said, to keep their brain fresh. You know, like our lawn and garden guys find that after a couple of summers, their shirts are faded. They look, you know, they’ve been sweating hard.

And them, they get stained. Sign with the cleaners, you know, doing bleach jobs and stuff like that. So yeah, replace your uniforms, get some new uniforms every year and check the old ones out. You want to look professional, right. That’s not a big expense. You know, you might be talking about 100 hundred and $50 a year just to keep the uniforms looking sharp.

Yeah. You can, you can I the signwriting over time. Well, my highlights has been so unwritten a six, 6 or 7 years now, and it still looks fantastic, but. But in time. Yeah, you do need to do your vehicles, but they last a long time. So it’s those sort of things I’d recommend people keep aside. But it’s nothing like the other businesses, you know, one of the businesses, the example you just gave, I was in a, national conference where the company I was working for released Big Song and dance.

Our new landmark was the company name with the a new This Green line that they would do around all the stores and everything. That was our signature. And I was so excited and I was sitting with we used to run some franchises as well back then, and so some of the guys in western Queensland had franchise stores with landmark, and I was like, man, this is cool, this is awesome.

And all these cars are getting redone. And they were sitting. They go, there’s another 60 grand gone like that was their response to that. And I was like, oh yeah, you got to pay. Yeah.

Rhiannon That’s it.

Justin It’s a big cost when you have those sort of stores. And yeah, it’s not something people think of. I mean, it’s all in the contracts put very clear and plain. And let’s be honest, in our contract, in a franchise agreement, it does say if we request people to rebrand, they need to write. But in will, in the 15 years I’ve been with James, I’ve never heard of that being done.

And you’ve you and Sam, you’re came up with a fresh new brand. We didn’t go on and force everyone to get all their cars done or anything like that. It’s just over time, people have transitioned to the new fresh look as they reorder uniforms, as they race on cars, you know? So yeah, it’s a huge benefit in an organization versus other business models.

Rhiannon Yeah. And we did rebrand. We rebranded in 2020. We did we did do a total overhaul of the look and the feel of our brand. Everything, got updated. And in reality, what that looked like for our business owners was, you know, we worked on this for a while. They were aware that we were working on a rebrand, but at a point where we launched that new brand, we also went out to our business owners and we said, hey, we’ve got this rebrand.

We have been working on it for a long time. We are really excited about it. It does bring us back into the 21st century in terms of our how we look. Yes. However, we want you simply to adopt it at a pace that makes sense for you. So next time you go to order business cards, you’ll be ordering with the new brand.

Next time you go to order some brochures, it will be the new brand. Next time you reach out to us. If you need to get your car signed, will design it with the new branding. That was it. It was slow. It was steady. You know, our uniform provider just simply updated their logos. And then from that day forward, everything that was printed was printed with the new brand.

But most franchise networks will put a date or a time frame on it and say, you must transition across by X date, and it is your responsibility to do that and to wear the cost of that. And we just said, hey, next time you’re going to be buying brochures, it’s just going to have the new brand on it.

So we tried to be, you know, we wanted obviously to bring a fresh brand to the marketplace, but we also wanted to balance that with just trying to be really conscious of our responsibility to our business owners, to give them the opportunity to make the most profit they can in their businesses.

Justin Frankly. Yeah, yeah.

Rhiannon Which is always.

Justin Something. It’s just this has just been brought up fresh to me, you know, like it’s not something we because we’re I guess we’re in the weeds a lot every day working in our business. We forget what an advantage this is from a risk on a day for someone joining us with a great goal on the Gold Coast that have been meeting our team, looking at joining, pre-COVID, he started a restaurant at Burley on the Gold Coast, started he had three restaurants, over 300 staff that he was running in his restaurants.

And then, you know, Covid happened and and yet you talk about fixed costs and stuff and the just the pressures obviously, you know, very successful business, but the money and the pressure to have a business like that when without businesses, like someone with those skills, that skill set, if it brings that same drive to a business like this, I mean, we have businesses now doing 20, 40 plus k a week, you know, in their businesses.

And, you know, once they get to that sort of level, they’re not on the tools at managing staff and stuff like that. So it’s a whole different dynamic. But the potential there for $1,000 rent like like.

Rhiannon You’re.

Justin And you’re not signing property leases that, you know, you mention the leases on a restaurant, you’re talking hundreds of thousands a. But I know in our coffee van, we knew we had to sell over 100 cups of coffee a day. And when we set ourselves up, you know, 100. That’s a doesn’t sound like a big number, right?

But that’s every day. And, you know, first day, I think we sold about 25 cups. Well, that means the next day, to cover our costs, we had to sell 175. And before you know it, you know, like how literally this is, we’re not meeting our fixed costs because the fixed costs are so much of the turnover. Yeah. So, yeah, sorry I am raving, but it’s something that’s just really sparked a fresh that this is a huge plus.

You know, the subscription model is awesome. But go back to the actual roots of what the business is. It’s a super low cost, super low risk. If people get in and follow the system. I think one of the episodes we’re going to do is talk about what do a good business owners do, right? If you do those things for a minimal upfront investment, minimal ongoing costs, you can really have that work lifestyle balance and, good money.

Rhiannon Well said. I don’t think I could have said it better myself if I had a tried. And on that note, let’s leave this episode right here. We have covered well and truly, the topic of costs. And what an interesting one, because we have unpacked that not only are we the lowest startup cost in the sector, we are probably also one of the lower ongoing cost based businesses, with very, very minimal, if any at all, capital expenditure cost to consider.

So that’s a very different angle for you to think about. If you’re thinking about starting a business. I hope that this episode has been helpful, and I hope that you will join us very soon for another episode of The Real Franchise.