Nic Gray is the founder of Graypoint Ventures, a Franchise Development Group bringing fresh, innovative and demand-driven concepts to the marketplace. He started his career working for franchise development groups when he was 19 and then served in the Army, where he served as a Non-Commissioned Officer in Platoon Communications for 4 years. Since then he has founded four different companies.
I've done 4 interviews so far with Veterans about franchises. Nic started a Franchise Development Group, which provides a free service to help Veterans figure out whether or not a franchise would be a good fit for them, and if so, which franchise to choose. This is a great episode for anyone on Active Duty considering entrepreneurship, as we talk about a lot of topics related to entrepreneurship.
- StoryBox- People trust each other more than advertising. StoryBoxprovides the tools and supports businesses need to take the best things customers say about them, and use them to drive more sales and referrals. StoryBoxoffers a 10% discount to companies employing veterans of the US Armed Forces.
- Audible is offering one FREE audio book to Beyond the Uniform listeners. You can claim this offer here, and see a list of books recommended by my guests at BeyondTheUniform.io/books
- Special thanks to Mark Frank (Episode #65) for making the connection to Nic Gray
- Related Franchise interviews
- BTU #129 - Veterans & Franchises (John W. Francis, aka "Johnny Franchise")
- BTU 141: The CEO of Franchise Business Review talks about Vets in Franchises (Eric Stites)
- BTU 147 - Founding Sport Clips Haircuts & Building 1700 Franchises (Gordon Logan)
- BTU #132 - Active Duty to Chick-fil-A Franchise Owner (Marlon Terrell)
- 401k / TSP roll-over - allows you to take your retirement account and take part or all of it and roll it into a business venture like buying a franchise. You avoid paying all penalties and taxes, and can have your money in 15 days
- If you want to get into startups in general, Nic recommends:
- Patriot bootcamp - listen to my interview with Patriot boot camp #137 here
- Bunker Labs - listen to my interview with
- The Lean Startup - great for anyone thinking of entrepreneurship
- 5 Paragraph Business Plan: The Action Oriented Business Management Tool For Leaders
- 7:10 mission, marry franchise and veterans
Transcript & Time Stamps:
Joining me today from Denver, Colorado is Nic Gray. A quick background on Nic - he is the founder of Graypoint Ventures - a franchise development group. He started his career working for franchise development groups at 19 years old and then served in the Army for four years. Since then, he has founded four different companies.
How would you explain Graypoint Ventures?
It’s a pretty simple thing to explain. We help people venture into business ownership through the power of franchising, particularly when it relates to veterans transitioning into the civilian sector. We sit with these people and talk about what their goals are and take them through a discovery process to figure out if entrepreneurship is a good fit for them. If so, we start to break things down and build a concept with them and from there we start to go out and identify different franchise concepts that will help them achieve their goals.
Have you seen any commonalities as to reasons people initially interested in franchising end up opting out of it?
Yes there’s two main things I see. The first is that they aren’t suited for entrepreneurship. Secondly, with those that we find that are qualified to be an entrepreneur, not all of these people will be the right fit for franchising. True entrepreneurs want to be cutting edge trailblazers. That’s awesome. However, certain people want to create the playbook rather than be given the playbook. So true entrepreneurs that want to create the playbook might not be the best fit for franchising. These people might not want to be confined to a certain system that is put in place for them.
I think one of the great things about franchising is that it can be a great fit for people who want an entrepreneurship experience but also with the guidance of an established franchise in place.
That’s right - no franchiser is really looking for someone to come in and recreate the playbook. They want someone that can take the playbook and execute on it. That’s why a lot of the franchisers out there love veterans. Veterans know how to take a mission and go execute. So it’s a win-win when you marry franchising and veteran entrepreneurs. Some franchisers also offer a significant discount to veterans as well.
Is there a certain amount of money that someone needs to have set aside in order to go into franchising?
The amount that I would say you need to have saved is $20,000. However, depending on franchise model, that can vary. A lot of people think of franchises almost exclusively as food chains. However, the reality is that the majority of franchises in the United States are not food related.
Franchises like McDonald’s or Burger King can take up to $300,000 or $400,000 to get into. However, if you look at more of a service related franchise, you can get in for as little as $20,000. A lot of these service industry franchises can run profit margins as much as 80-90%. Whereas food service profit margins are more like 10-20%. So it all just depends on what you’re trying to achieve.
Is it accurate to say that many people who go into franchising in the food service space go to the Small Business Association or friends and family in order to raise enough money to open the franchise?
That’s right. There’s also another funding mechanism that people aren’t familiar with. It’s a 401k or TSP rollover. You can take part or all of the money you have in these accounts and use it to start a franchise. This is endorsed by the IRS. Using this can make your break even point quicker to reach.
How long is it usually before a person breaks even once they start a franchise?
I would recommend having at least six months of living expenses socked away. However, it does greatly vary depending on your business model and operating budget. There are some franchises that you might be in the black within the first month or two whereas with others it might take a little longer. It also might depend on the size of your family and what other income sources you have.
You mentioned food service and service franchises. Are there any other types of franchises out there?
There’s really a wide variety - everything from childcare and education centers to wineries. They really run the board. A big one right now is senior care. There are franchises that are out there and they are all about senior care. The franchises allow people to stay in their homes rather than having to go to a nursing home.
Are there specific franchises that you recommend?
I get that question all the time. If someone is looking at food service - I would recommend double sided drive through coffee shops. They are like little huts that are in the middle of parking lots. They are really money makers. It doesn’t take too much money to get them up and running and your inventory is less. Also there are fewer employees that you need to pay. This can also be a real estate play too if you want to buy the land. That way if the kiosk doesn’t do well, you still own the land.
When you consult with veterans to help them get into franchising, it’s 100% free?
Yes that’s correct. Really what happens is that franchisers pay me to bring them qualified people. They get inundated with inquiries. The reality is that they want to talk with qualified individuals. As far as the benefits for clients that come to me is that I save them a lot of time, money, and energy in that research and discovery process. I work with a lot of people across the board and veterans are my favorite group to work with. When I left the military, what I missed the most was the sense of purpose and camaraderie. Being able to replace those after you leave the military is so critical. I think being part of a franchise can help fill these voids.
What resources would you recommend to people that are interested in going into franchising?
If you want to get into the startup world, look into Patriot Boot Camp. Patriot Boot Camp is a non-profit organization that helps veterans start tech companies. Also Bunker Labs. They have satellite offices around the country do something similar to Patriot Boot Camp but just in a different way.
In Episode #137, I interviewed Charlotte Creech of Patriot Boot Camp and then in Episode #139, I interviewed Todd Connor of Bunker Labs. Both of these are great organizations. What would you want listeners to know from your years of experience in entrepreneurship?
The first thing that people should 100% understand is that there is zero value in cool. The biggest thing is that you need to be able to have a solution for a problem that currently exists. The best way to do this is to research the market and then talk to someone who you think would be target customer. The Lean Startup Model is a great book to read on this topic. The biggest thing that people should avoid is going for the cool factor. It’s the same as franchising. A lot of things in business aren’t very sexy but they can be very profitable.
Do you have any final words you would share with our listeners?
There’s a project I’m working on. There’s an author, Michael J Petty, who took the five paragraph operation order that we used in the military and translated it into a business planning book. So I formed a partnership with his book and his business planning based off of the business planning and strategies that we learned in the military and created a franchise system. So we’re now in the process of on boarding veterans into this franchise system operating off of the 5 Paragraph Business Plan which is based off of the 5 Paragraph Op Order we all learned in the military. So I would highly recommend checking this out.
Thanks so much for your time today, Nic.