The Art of Succession

Welcome to the Art of Succession podcast

with Barrett Young. Join us as we

explore the strategies, stories, and

insights that shape the journey of

leadership transitions and business

success. No matter where you find

yourself along the journey, this is the

podcast where you'll find the tools to

make it happen.

July 4th, 2002 was my freedom day. That

was the first day that I was on my own.

So, it's 23 years almost. So, for the

first 6 months, uh um I was just like a

sponge. I was just learning from my dad

and from uh people on the field just to

see what's going on cuz remember I knew

nothing. What saved me from going back

and maybe not, you know, becoming

successful later in life was that there

were no jobs at all. Like zero. Nobody

was hiding.

My name is Barrett Young and this is the

Art of Succession podcast. My guest

today is Max Emma, CEO of Franchise with

Max. Over 20 years ago, he joined his

dad's landscaping company and helped

grow that company to nearly 100

employees. After a series of ups and

downs in that business, which we'll get

into, he started an accounting company

and through that became really

interested in the franchise business

model. Max, welcome to the Art of

Succession.

Hi Barrett, it's great to be here. Thank

you for having me. Um, before we get

started, I want to know like what really

drives you to be a guest on podcast?

What brings you to the art of

succession? Like what's the message that

you really want to help my listeners

through uh in our episode today?

Well, um, if I can put it in one

sentence that there is a light at the

end of the tunnel. uh because it doesn't

seem this way when you're actually going

through some issues in a business at

least when you're young. I'm talking

about my experience when I went through

I'm sure we're going to talk about the

downs of the businesses. Uh I saw this

is it. I saw this is you know I'm done

and I'll never be able to recover from

that. you know, uh, I'm glad I was wrong

and I'm glad I proved myself that it

wasn't the case, but as somebody said,

you can only um point you can only

connect the dots going backwards. You

you don't know what's what's going to

happen. That's why um that's probably

and I'm sorry it's longer than one

sentence, but um that's really what I'm

trying to do is just to tell people that

hey, you know, you you you you can do

it. You just have to be strategic and

have to be smart about it.

Yeah, great little perspective gaining

then. Okay, awesome. Um, so let's get

started. Um,

two 2002 you joined your dad's landscape

company. Um, was this like as a as a

young man straight out of college, plans

for after high school? Like what brought

you to join your dad's landscape

company? Is it that's what you always

wanted to do? No, I did not. I actually

worked for the largest employer in San

Diego. So, I rewind back a little bit.

My whole family came from the former

Soviet Union 32 years ago. I started

pretty much from scratch being 18. Got

my finance education, got the job. I

also had an offer on Wall Street, but

decided to stay in San Diego because,

you know, that's where my family was and

wor corporate finance for 4 years. I had

a really bright career in front of me.

They offered to pay for my MBA. Uh but

my joke is that I was always kissing the

wrong butt in the corporate world. Uh so

I wasn't getting promoted as fast as I

wanted to. Maybe I was too ambitious and

I understood the corporate life is not

for me. And I talked to my dad. um he

started one uh landscape uh maintenance

route with three employees. That's all

he could do. I mean my English was zero

when I came to this country. His was

below zero and he hardly learned

English. Uh so that's probably was the

maximum of what he had and he's like

well if you want to you can come and see

what we can do with it. And so pretty

much for the first few months he if not

six he taught me and then I just took

over uh the business and learned and got

my license and everything else. So no I

had experience in corporate world. So um

funny enough I left uh the company it

was called Qualcomm still is it's one of

the largest companies in San Diego uh if

not in California um July 3rd 2002. So

July 4th, 2002 was my freedom day. That

was the first day that I was on my own.

So it's 23 years almost that I haven't

had anybody to give me a paycheck. So

the only person who signs my own

paycheck is me. So that's an interesting

experience.

Yeah, for sure. Um, you came in to dad's

company just to to relieve like the

ownership duties or was the intent for

you to come in and grow it? I mean

what's what's going through your mind at

that time

leaving corporate and finance and

intent was definitely to grow it. I mean

I wasn't interested in three employees

and look my dad was just perfectly fine

handling three employees and just take

it to the next level. So uh I wanted to

be my own boss and eventually I wanted

to see what can happen. I wanted to push

uh further without asking anybody for

permission. You know, I always been a

guy. I'm going to ask for forgiveness

and not permission. So, um that that was

my logic and and we did that. The

company from landscape maintenance

became a landscape construction company

when I joined the company.

Okay. um what kind of growth um what

kind of how did how did you grow other

than speaking better English than your

dad and and the intent to grow beyond

three employees? I mean what kind of

scaling were we talking about at this

point? Well, getting construction

license, which uh is not an easy task in

California, passing I want to say it was

four exams if I'm not mistaken. And uh

it was the business exam was the easiest

one for me. I think I got 98 out of 100

because you know I got a business degree

from university. But uh knowing the

Latin and the English name of all the

plants and knowing what the difference

between them, biology never was my

strong suit in school and

please remember I went to school in the

former Soviet Union. So I knew Russian

versions of that. So looking at them in

English when I was learning, I had no

idea what the hell those plants were. So

that was interesting. Uh but after a few

failures I was able to pass them on get

the construction license and that was a

huge start because uh that allowed us to

go and start offering construction

services.

Okay. H about how long um or how

immediate did you see start to see

growth in the business?

So for the first six months uh um I was

just like a sponge. I was just learning

from my dad and from uh people on the

field just to see what's going on cuz

remember I knew nothing. So I had to

learn uh everything from scratch and

then in parallel I was studying for the

exam. So I'd say in about 6 months 9

months I passed the exams. I don't

remember now exactly. And uh um so

within a year from joining uh I've seen

the growth. We started you know slowly

offering this service and hiring more

people and instead of um

using subcontractors we started doing it

ourselves hiring our own company people

and such. And slowly but surely, we were

growing, growing, growing, growing until

it became a snowball, which eventually

we couldn't stop and eventually got

under it.

Yeah, we'll we'll get into that in a

second. What's what's going through your

dad's mind having you join the company

uh at this time? Is he looking to

retire? Is he looking for help? What you

know, what what brought you in from his

perspective? I don't

Did he want want to grow the company

just knew he wasn't the one to do it?

I believe he wanted some kind of a

legacy and he wanted to do something

with it. And look uh uh he

had construction company back uh where

we where I grew up and you know had ton

of employees and he uh had engineering

degree, master degree. So having three

employees doing changing sprinklers and

cutting the grass, um he could do better

than that. He just didn't have the

ability or capability to do that. So I

guess for him it was uh um

you know something that he wanted to

pass on to me. And but once he did they

started traveling a lot with my mom and

you know uh which I think they've been

to like 44 46 countries. I mean not a

lot of Americans uh can say they went to

so many countries you know coming from

Russia and never being anywhere till the

age of 55 and then seeing 40 countries

that's pretty awesome.

Yeah that's great. So, is he owner in

the company and walked away at this

point from operating it or had he

transferred the company to you? Talk

through that a little bit before we get

into that snowball that you talked

about.

No, we were in it together. So, I took

over the

CEO role. I mean, actually, look, with

three employees, the company didn't

really have a CEO. So it's like three

employees and my dad was on the field uh

uh you know just making sure the job is

done and talking to the homeowners. So

that's really what what it was. So uh

when I came over and understood what's

going on and again took took me some

time which is totally fine. Uh I'm glad

I took time to learn. Uh we just started

to create the company and eventually we

got the estimating department. We got uh

you know uh people doing sales and

foremans and managers and supervisors.

So really it was becoming bigger bigger

bigger bigger. It was becoming a real

business. You know I will argue that

three employees doing uh maintenance

route. It wasn't a business. It was

just, you know, a way to make some money

which is like very very limited cuz you

are limited to uh the capability of one

crew. Whatever they can do, that's

that's all you can do.

But how long did it take dad to walk

away from working in the business?

He didn't start to travel and things

like that.

He didn't walk away. He just slowly was

giving up more and more responsibilities

and eventually he was just there more

like an advisory role. So he never

walked walked away uh

for in in this first company. So he was

always involved but you know less less

and less so. And look he had 35 40 years

of construction experience. You know I

didn't have that. Uh so I always was

asking him and he was always there to

give the advice. He might have not known

the name of this particular process in

English, but look, construction is

construction. Like if we were pour

concrete, he knew exactly how to make

sure that the rebar goes in so uh it

doesn't crack in two weeks. And uh I

always had him on the job site when

we're having important jobs just to

watch and make sure that the job is done

correctly.

Okay. So, I know you you said the snow

you got underneath the snowball at some

point and I know that that's what's

brought you to your next your next

business. Um, talk talk to me about what

happened there. What was getting away

from you? Warning, we'll get into

warning signs and things like that, but

but talk talk me through that process

now as the business started to show

cracks. The snowball was that we started

growing too fast. That was 2006, 2007,

uh, Southern California was growing like

crazy. The real estate market, our

specialty was track homes because, uh,

the track homes in San Diego, and I'm

sure it's the same in other markets,

pretty much was dirt in the front, dirt

in the back, and the building. and you

had 60 90 days depends on the HOA to get

landscaping done. So you would buy it

and then you have to do it you have to

do a certain minimum and that's where we

would come in and do uh the actual uh

landscaping including the hardscape

concrete and everything else. And later

we went into designing and

subcontracting pools and we were doing

fountains, barbecues, you name it. So,

it was like really nice uh um yards that

that came out out of that. So, we're

just growing too fast because people

didn't want to wait uh uh five, six

months to get their landscaping done for

different reasons. They wanted to leave,

you know, a beautiful yard and then also

the HA was on their back. So, uh they

were kind the waiting list was huge. I'm

like, well, we have the customers. So

the next logical step is to get more

equipment with the perfect rate history

that was easy, hire more people, train

them and put them on the job site. And

so we were doing exactly that. I think

at the end we had I don't know 20 plus

trucks, we had equipment, small cranes,

you know, you you bobcats uh uh

everything and 96 employees. But uh what

happened uh they stopped building the

real estate crash of 0809. It just you

know they stopped building and we were

going through the inventory of uh jobs

that we had. We were finishing them up

but then there weren't any new jobs. But

we had all this equipment that was all

financed. We weren't buying it with

cash. we were financing him and we're

getting great deals but we had to pay

with zero income. So the uh snowball was

that it was a fast growth and we did not

pay attention to the financials and the

sad part was that I am a finance person.

Uh my wife at the time who also became

part of the business she had masters in

accounting so she understood accounting

really well. I understood finance, but

we're so busy growing that we didn't sit

and look and see that hey, it's slowing

down. We need to do something. Uh, right

now I I don't know if um we had any

other way out, but probably wouldn't be

so painful cuz as you probably guessed,

we didn't have a choice but go into

bankruptcy. And um the way construction

works, uh you have to personally

guarantee it. So it wasn't just uh uh

business bankruptcy. It was personal

bankruptcy as well. So I remember with

uh we had to sell the house. I remember

I paid every employee

every employee got paid and then I

literally hang the keys uh on the

warehouse and I'm like I'm out of here.

And then I walked and we declared the

bankruptcy the next day both business

and and personal. And that was with one

baby at home and one away. So that was

pretty scary at a time and I literally

thought this is the end of my life.

Um I mean that's a scary enough time uh

just as a business owner, but you're

specifically I mean the housing bubble

targeted your industry. Um

how did you how did you work through

that? How did you learn to see this is

not the end? like there's going to be a

future here because I know just from

what you've shared and we we'll get into

this too. You started that company

again. Um that same similar kind of

company, right?

Not that company. It was similar.

What's going through your mind and um

how do you b how do you bounce back from

that?

So it wasn't the same company. It was

same industry though, right?

That it was maintenance. Okay. So I'm

like I'm done with construction when I'm

doing it. I'm not by we're going back

into mowing the grass and changing

sprinklers and doing you know just the

maintenance but but with the experience

we also started doing some commercial uh

commercial maintenance but it was just

maintenance. We did not do any

installation whatsoever. I got burned

pretty bad uh the way it was. But what

was going through my mind was that I'm a

failure and I'm uh probably not meant to

be entrepreneur and I need to go and

work for somebody. What saved me from

going back and maybe not, you know,

becoming successful later in life was

that there were no jobs at all. like

zero. Nobody was hiring because you know

that was little literally a crisis. I

mean mortgage, real estate, uh you know

the younger people don't remember that

but people who are even young younger

than me they remember pretty well. There

were no jobs. Everybody was getting laid

off. So uh I don't think I could have

gotten a job at McDonald's at the time.

Not that I was looking but you know I

probably couldn't. So the only reason I

went and opened the company again

because I didn't have a choice.

So that saved me. That turned out to be

a good thing. At the time I was like,

"Oh my god, I'm risking again and doing

it." But, you know, I didn't want to do

it. So I I was, you know, really

depressed. But, you know, the second

company was open because we didn't have

any other options. So, as I said, one

baby at home, one away. they want to

eat. So we went from huge house that we

owned which we ended up selling uh to

renting like a really really small place

uh until you know we slowly recover

recovered from that.

Um so neither you nor your wife were

able to find work to get through this.

Well, I mean she was once we declared

the bankruptcy

uh

she was uh four months pregnant. So

definitely, you know, she wasn't looking

with another baby at home and we didn't

really have the money for babysitters

anymore. Um so not not really. And the

jobs were in development. It wasn't just

that uh you know she wasn't she didn't

want to get water cool or I didn't want

to get water it just wasn't available.

So we opened the company started doing

it again. Um and when the first company

closed that was the first idea

came to our mind. We wish we had an

accounting company doing our

bookkeeping. No. So we would get uh the

sign what's going on earlier and the

fail wouldn't be that painful.

So that gave us a first bell you know.

So which is you know I strongly believe

uh in the slide that one thing leads you

to another. It's like life is a series

of event. You would not get to point C

without going through point A point B

first. That's just my my life always

proves that. And uh so that was the

first sign and then once we opened the

maintenance company started growing it

that was you know after a while became

easier it wasn't as big it was

relatively smaller and I think at it max

we got to 18 or 20 employees before we

sold but at some point we're like okay

we are finding you know the bookkeeper

uh who's going to be doing the

bookkeeping for us and I remember going

on Google I don't know it was Google or

something else at a time. I remember

internet wasn't what it is now. So I

found 20 bookkeepers in San Diego area.

Some didn't return my calls. Some I met

some talk on the phone and I got 12 15

proposals for exactly the same scope of

work. And the price differed from $200

to $2,000 for exactly the same scope of

work. And that's what told us that hey

there is a gap in the system which we

need to go and you know see what and

monetize it because no way you can get

such a huge fork between $200 $2,000 for

exactly same scope of work and that's

how books keeping started that's uh that

was the beginning of the bookkeeping

company and it started actually in

parallel to the landscape maintenance

company. So, it was running two

businesses at the same time. But once we

started bookskeeping, after a while,

we're like, you know what, we probably

need to sell it. And so, we put it out

for sale. Took about a year and we

actually sold it and started

concentrating on bookskeeping full-time.

Gotcha. Okay.

Um, so then it wasn't it was the housing

bubble for sure. that but it sounds then

like your own personal books were not up

to date either at that time. you wanted

to have an external person to hold

accountable for that and so it

company's just growing so fast it's not

per it's not as important to

yeah we were f we obviously obviously

were filing taxes and we were fine this

way but we didn't do it you know on a

monthly basis and we didn't sit down and

analyze hey look at this project let's

do this let's do that so that what we

weren't weren't doing we understood the

importance of it and after a while um

right now I just told you what happened

but I take 100% of responsibility. So if

it's anybody's fault, it's me. It's

what's mine. Because there were a lot of

companies who made through they maybe

caught some fat and they um you know let

go some employees but they sat through

the storm and then obviously the house

bubble started again and hasn't finished

yet. Uh San Diego is growing like crazy

right now and it's the same situation.

People need landscaping, people need,

you know, maintenance and so on so

forth. Uh so it's funny that the company

was sold, the maintenance company,

they're still around. Uh we sold in

2013, just literally two days ago, I saw

a truck on the freeway and I was

actually trying to drive and take a

picture. you know, that was so cool to

see it after few years because I haven't

seen them on the road for a few years,

but it was really cool.

Gotcha. Now, as um as a bookkeeping

company for business owners like this,

you you mentioned cutting the fat,

letting people go. What were some of the

warning signs um that you guys were just

the volume and the speed at which you

guys were growing uh you weren't you

weren't catching? What would be your

advice for business owners? It a lot of

people don't realize how easy it is to

grow too fast.

Well, what

what killed I don't say killed us, but

you know, because what doesn't kill you

makes you stronger. So, it didn't really

kill us, but what what what happened? We

were over capitalized. So, we had a lot

of equipment and there were a lot of

payments. So if let's say all the

equipment was paid off or we didn't have

that much, we would figure it out

because okay, the income goes down. Yes,

unfortunately have to let some people

go, but you know, we still had some

clients and we still had some business

and we were doing a little bit of

maintenance at a time. So probably it

wouldn't be 96 employees, but I don't

know 10, 15, 16, something that, you

know, we can sit and then slowly, you

know, add back on. But the problem was

with all the equipment and everything

and all the payments. It just, you know,

the income went I said I I said it went

to zero. It didn't go to like exactly

zero, but close to it. You know, when

you go from 96 employees to, you know,

way less, obviously it goes goes down,

but uh the expenses stay. And so the

warning sign was just to see what your

payments are and see if they're

sustainable. Okay? Maybe don't buy that

much equipment. maybe maybe rent it.

Again, uh the employees,

is it uh

bad to let people go? Absolutely. But if

you don't have a choice, you don't have

a choice. And look, uh people could go

and get unemployment. Yes, it's not a

full amount, but it's something. But

what are you going to do with equipment?

I mean, you the bank saying, "No, no,

no. We want our money. You took the

loan. We gave you 0%. They give you a

great deal, but you know, still have

three or four years left on this

equipment.

Yeah. And even if you say come and get

the equipment, they're still going to

require the difference from you. You're

just not going to have the equipment to

be able to make that.

Yeah.

And the saddest part they would go after

me personally because I had to

personally guarantee it all cuz even

though the credit card said the name of

the company, it's still my name and my

social security. So ultimately uh just

doing the bankruptcy for business would

not help because they would turn around

and go after me.

Mhm. Okay. Um so you built the next

company and it sounds like you also

diversified the revenue just uh a little

bit more. You said going for larger like

corporate contracts and things like

that, commercial contracts rather. Um

how soon you said you built the two

alongside each other. Or was that like

you come out of this experience with a

resolve that or or was it just the

market like you said

I know that that you and your wife both

had experience in finance and accounting

and stuff. So why go back to building a

landscaping company and not just build a

bookkeeping company I guess is my

question. Well, back in ' 09 again she

was uh you know due with the baby and

you know bookkeeping was just the idea

that if we did would be nice but uh

between that and actually opening uh

bookskeeping

two or three years passed. So uh we were

actually

look at at a time opening bookkeeping

company for whom? I mean all the

businesses are going down. Not all but a

lot of them. So a lot of people losing

the jobs and uh we didn't even have this

idea at the time. Hey, let's stop

everything we're doing and start doing

uh bookkeeping at this time. So

landscaping seems like hey I know how to

do it. It's just going to be maintenance

going to be way smaller. And you know I

uh once I opened it I was able to bring

my top employees. So I'd say, "Hey, you

know, here's a new gate. Do you want to

come and work with me?" Like some most

of them said yes. And they came in and

we started working together again. And

those were the people I trusted.

Okay. Gotcha. Makes sense. Um Okay. So

you sold the landscaping company, the

rebuilt landscaping company or the the

new landscaping company about 12 years

ago. Um and you decided to focus your

attention entirely on bookskeeping.

How did you go from that I I guess what

was your entry into franchising because

that was not a franchise. You built that

from scratch. So talk to me a little bit

about the growth of bookskeeping and

it wasn't a franchise but again point A

leads to point B. Point B leads to point

C. So the person who

sold our landscaping business

at some time introduced me to a small

franchiseor. They had, you know, several

franchises just because they needed

bookkeeping for their franchises. So we

talked and then they gave us one uh

franchisee to do bookkeeping for which

was outside of San Diego. And we're

like, "Huh, not that we can do it

remotely. That's really interesting. And

then remember that's a while back we're

talking about 15 16 17. So now it's like

we're talking about Zoom. It wasn't like

that. People still wanted somebody in

their office. I mean nobody even

considered the Skype was the top of the

you know communication channels at a

time. Um so um again who knew he would

sell the bookkeeping business. We stayed

in touch. He introduced, we started

talking and I'm like, franchising?

That's interesting. There are a lot of

them because I didn't know much about

franchising. Like most people here, I

thought that McDonald's is a franchise

and that's pretty much it. I mean, I

knew there were more, but I really

thought that that franchising in US

started with McDonald's. I was amazed to

find out that it started in the middle

of 19th century and you know, not with

McDonald's. But you know, you learned it

as as as you go. And so this one

franchiseor led to introduction to more

franchisors. I'm like, I really like

this. It can be a great model. and then

started digging in and going to the

events and meeting more and more

franchiseors and uh today bookskeeping

that's one of the companies that I still

own um has over 100 franchise brands

that we do bookkeeping for all over the

United States. So we are one of the

largest providers bookkeeping services

for franchise brands. So like uh sport

clips uh fast signs uh a lot of other

ones are our clients. Um and so that's

how we got into franchising. And then

being around franchiseors

I really

said to myself I want to be like them

when I grow up. you go to a room with a

bunch of franchisors, the

um energy in the room, everybody is

trying to help each other. Like I've

seen many times two main competitors

sitting at the bar at one of the

franchising events that I go to,

probably eight or 10 of them a year and

uh talk to each other. They each have

3,000 plus units. They're direct

competitors and they're having a drink

and talking and sharing. Okay, this was

awesome. I'm like, this is really,

really, really cool. And on the same

token, right now I'm way smaller French

resort that a lot of them, but I go at

the show in Las Vegas that we have expo

every year. It's about 3,500 people,

probably 2,000 franchiseors. You

literally can come to the CEO of uh

McDonald's or any other brands, stop

them in lobby and ask a question and he

or she will stay for 20 30 minutes and

spend time with you and then give you uh

their phone number just hey you know

call me just you know any questions.

People are like that in franchising.

It's absolutely a unique uh industry of

its own. Yes, a lot of them are

competitors, but you know, they all

believe in abundance. That's enough work

for everybody.

I g I guess for my listeners who are

thinking franchise, they're thinking

McDonald's, they're thinking Subway,

something like that. How do you go about

franchising a public service or a

professional service firm like

bookkeeping where, you know, every

town's got a dozen bookkeepers? How do

you go about franchising something like

that?

Well, I know it's a cliche, but it

starts with an idea. It's like literally

that was just an idea that I think we

know enough to pass on this information

to local businesses because we started

getting more and more franchises, we

without really going for it became a

national company. But I realized that

the uh local markets were still

underserved. And I I literally woke up

one morning uh I was in Philippines uh

visiting my office. We have an office in

Philippines. Uh actually between three

of my business have employees in 10

countries but that was Philippines. I

woke up in the morning and I wrote a

business plan for franchising on a

napkin. So uh that was the first

version. I'm like we are franchising. Of

course, it took longer to put it to

life, but that was uh that was the idea.

And um we

started with legal work and then

marketing plan and then development plan

and brand manual, which is really like

your Bible how to run the business. That

that's what you do for every franchise.

That's what that's why people pay you

franchise fee to to to get it done. And

because we were around I was around many

franchiseors.

I realize that it's not just McDonald's.

And definitely I believe don't quote me,

but it's definitely over 3,000

franchisors in the United States. Okay.

Uh and then

multiple indices and a lot of hotels

that we know there are franchises. A lot

of upscale restaurants like you know

Flemings and such they are franchises.

So of course McDonald's and you know

fast food but it's not just fast food

stores uh insurance companies

everything. And then uh at a time there

was only one uh bookkeeping franchise

existing. So we were number two. Now we

are the only bookkeeping franchise in

the United States.

And then uh talk about spreading out

because you also have a franchise

brokerage uh brokerage shop. So talk

about that how that came about.

Is that just a natural extension for

somebody that's bought an accounting

franchise for you? they added they add

the franchise brokerage or is this a

different clientele? How how did you get

into that? So yeah the idea was that

accounting business is not for everybody

and I realized that once we uh talked to

somebody and they said nah I'm not going

to buy accounting business after all and

we do train we do provide you know full

support and training but look if

somebody never seen financial statement

in their life we're not going to make

them an accountant in two weeks or even

two months of of training so it's just

not going to happen and people like nah

that's that's not for me and we say,

"Okay, well, best of luck to you." I'm

like, "But wait, I know so much about

franchising that I can probably uh

advise them and help them to get a

business of their dream that it's not

necessarily an account. The beauty about

franchise brokerage that as a broker,

I'm not getting paid until someone buys

a franchise and then I get a commission

from a franchiseor. So if somebody just

not buying then nothing happens then I

work for free but I'm totally fine with

that because you know it's my job to

realize if somebody is like really just

wasting my time or they're interested in

buying. If they end up not buying for

whatever reason totally good I'm thank

you very much. Okay let's uh keep in

touch and we always keep in touch with

them and maybe you'll be ready at some

point. So that's how the brokerage

started. just not uh people who already

bought uh accounting projects that's

people who didn't buy and now we're

going after different markets cuz you

know I didn't realize that franchising

can be a legal instrument to get people

into the United States uh uh through

different visa programs and not

necessarily L1 that requires $1 million.

you can get a visa for a little bit over

$100,000 investment in a business and

get a business that making money for

you. So that that's that's an awesome

combination. And so my specialty is, you

know, the E2 visa and also

uh

people that are coming out of corporate

America because again I have experience

in both of them and the fact that I'm

fluent in Russian helping too. So, we

are going for a Russian speaking

community. But, you know, I have a team

of people working for me in the

brokerage business. By the way, I have

team of people working every business

that that I own. It's not just it's me

and I'm changing my hats, you know,

every 10 minutes. So, there is no way a

normal person can do, you know, run

three businesses on his or her own. So,

you have to have teams, you have to

delegate, but that's that's a different

conversation. So it took me a while to

realize that and that was slowing down

my growth. As soon as I realized I

opened all other businesses that that

was a big realization for me.

Okay. Interesting. So then you're you've

moved from

working in a landscaping company,

building a landscaping company, working

in an accounting firm, a bookkeeping

firm, building an account a bookkeeping

firm, now franchising it to others,

and then progressing into brokerage.

Obviously, you've gained a lot of

knowledge. You've had a lot of

conversations. And so franchise with Max

then correct me if I'm wrong here. This

is now going into clients and teaching

them how to franchise their company. Is

that the next iteration of this for you?

So franchise with Max, it was the best

idea we could come up with how I can

tell people where to find me because

look, bookskeeping still exist for

people who need bookkeeping either for

their business or for their franchise.

Uh bookskeeping franchise is available.

We just sold one in Witchita, Kansas,

and we're working on a couple modules.

So hopefully uh they'll close in the

next few weeks. Um but then we have the

main entrance, which is the brokerage.

And I didn't want to list every site and

everything. So, franchise with Max is

literally uh a virtual business card

where people can come in and then

decide, okay, I want to talk to Max

about buying a franchise or I'm

interested in accounting franchise or I

need bookkeeping for my business. And

then from that they get to a certain

page, meet with one of my team members

and eventually everybody who comes to

any of the businesses end up talking to

me. I just have people, you know,

talking to them first, answering the

questions, seeing uh, you know, they're

serious and maybe, you know, they're

going to be ready in two years. So,

there is no point for us to talk right

now because in two years a lot of things

will change.

Gotcha. Okay. Um, I'm interested in this

franchise concept like as you go into a

business, what makes sense for a

business to start to think that they

should franchise? What do what are some

common I guess what would people look

for?

Well, you're talking about if I am a

business owner and I want to franchise

my own business later on. Um,

what could what could somebody be

looking for?

So, franchising it's really systems.

That that's that's all it is. People ask

me, "Why would I want to pay somebody

$60,000

uh and then pay, I don't know, five,

six% royalties every year opening a

pizza shop? I'm making the best pizza at

home. My grandmother gave me the recipe.

You know, no way you guys can make

pizzas like that." And I always say,

"It's one thing you do pizza for your

family for dinner. It's another one when

you have to do 100 pies in an hour and

they all have to come out exactly the

same. And there should be exactly the

same number of pepperonis on it if it's

pepperoni pizza so you don't run out and

the temperature and everything else. And

when you build the layout, you have to

build it so three employees are not

kicking each other on the kitchen. So

it's all science and that's what you pay

for. You actually and then you know how

much the price is for and what health

permits you need to get. So all of that

you're getting the systems. uh answering

your question. Um if you ever consider

franchising your business, have systems,

you know, write everything down, do

trials and errors. Um I'll give you I'll

give you a great example. Uh when I

decided to do the franchising with my

co-founder, we actually

um

you know decided that to save money, we

were going to do the brand manual

ourselves. And that's a Bible for you

telling you exactly how to run business

from A to Z. Why do we need them? I I

know it all. So talk to all the the

employees, took their comments, you

know, put my comments. We got 35 pages.

Like people not going to pay us a

franchise fee for 35 pages, you know, of

manual. So we ended up hiring

professional company. That's all they

do. They run uh they write brand

manuals. Okay. Once they were done, it

was over 900 pages

and they got it all from all of our

employees. It got it from our we had no

idea we know that much. I mean, a lot of

it is attachments, a lot of it, you

know, some forms. Okay. But let's say

half of it is actual text. I got half of

it from our head. So 450 versus 35.

That's a huge difference

just from conversations and recording

and asking further questions and coming

up with a here's what to do in every

situation. It sounds like just by coming

in and interviewing everybody doing the

work. And also I tell my franch I tell

my franchises uh we're not only going to

tell you what to do we'll tell you what

not to because I I will tell people who

are considering franchising make any

mistake and all mistakes you can

possibly make. It's fine. I haven't seen

a single person running a business who

have not made mistakes. So but do them

earlier before you franchise it so you

can actually warn your franchises. Hey,

don't do that.

Again, they own their own business. So,

no, they cannot go and change the

corporate colors for bookkeeping to uh

blue and green just because that matches

their kids' eyes. But uh at the same

time, if they want to spend millions of

dollars to run an uh Super Bowl ad for

bookkeeping company, I was using stupid

examples, but the idea I can't stop. I

know it's not going to work. I know that

30 seconds will not get them the

clients. It's going to create the hip

and then you know uh people going to

forget about you but ultimately if they

have this what is it 6 8 10 million 20

million now and they want to spend it

they can I can't stop them but I can

tell them I would not do it because of

this this this this and that.

Yeah. talk to talk to somebody that

target client that's in corporate and is

weighing the franchise versus being an

entrepreneur.

How much

how much freedom do these franchises

have

um still in the running of their

company? Yes, they know they learn from

your mistakes, learn can pick up from

your success, but I guess tell me make

that pitch. Well, they have a lot of

freedoms, but it's uh they have a

freedom to choose between different

options. Okay? They can't if we are a

bookkeeping company. I'm talking about

my franchise, we can talk about any of

the 630 franchises that I offer as a

broker, but let's talk about

bookskeeping because, you know, I know

it really well. Um, one of the things we

are not doing, we're not offering tax

services. And while I own this business,

I tell all my agency, we will not be

offering tax services. There is a reason

behind that because we get a lot of

referrals from uh CPAs. As soon as we

start offering tax services, uh we're

going to become their competition. So,

they not going to refer any business to

us. And today, we're the only asset

bookkeeping franchise. Obviously, H&R

Block and people like that, they're very

successful. They have hundreds if not

thousands of units and so they it's a

great business model but it's not my

business model. Okay. Like I strongly

believe that CPA firm will not be

referring businesses to H&R Block that

does bookkeeping for bookkeeping because

they offering tax services as well. I'm

not a competition. So that's why if

you're talking about freedom like that

franchises do not have freedom but

freedom to choose from different

options. Do they want to uh invest money

and send a lot of emails? Do they want

to spend more money on social media,

which we help with social media and

promotions, but if they want to do more,

they're always welcome. Do they want to

go and knock every door? Do they want to

become members of networking though? So,

they do have freedom. But I always say

that what franchises are getting or pe

rather people who are going into

franchise versus doing the business on

their own, it's an opportunity cost.

They'll eventually figure it out. Okay?

I'm not going to sit here and tell you

that bookkeeping is a rocket science. It

definitely is not. I mean, QuickBooks

was designed for non-accountants, but it

just how many mistakes you're going to

make and how long it's going to take

take you to ramp up if you do it on your

own versus if you already have the

manual, know exactly how to do it from A

to Z, how to do it, at what speed. So,

you most likely going to be successful

sooner.

So, that's the opportunity because what

would you do with your time if you gave

yourself a year or two years of, you

know, not figuring it out on your

Gotcha. Okay. Um, you mentioned a little

bit earlier, you can't take somebody

who's never seen a financial statement

and turn them into an accountant, but

what kind of training, what kind of

skill testing are you doing as a as a

franchise broker? Um,

should somebody lean towards a

restaurant franchise that's never never

run a restaurant before? I mean what

kind what kind of um pre-existing

skills would would somebody bring to the

table?

So there is no test because you know

really it's a conversation. This is uh

art. It's not a science. I'm trying to

figure out where the person want to be

in three years or five years and uh what

their uh life going to look like. Do

they like to travel? You know, if it's a

restaurant business, I'm talking to

somebody in Las Vegas right now who is

considering different businesses and you

know, one of the business is a tenning

salon. Believe it or not, it's very

popular in Las Vegas even though it's

hot, but a lot of people don't have time

to stay on the sun and it's too hot.

They want to go get in and out in five

five minutes and then they done. Okay?

And then they can go with their life.

Uh, so I I tell them, let's say it's

closes at 8:00 p.m. You don't have to

worry about this business after 8:00

p.m. after the door is closed. Nobody

going to call you 1:00 in the morning

and tell you, you know, I want to get my

10 now. Well, tough, but you're not

doing it. You have to wait till we open.

And if we close for Christmas, close for

Christmas. If you have a plumbing uh

franchise and you are actually on the

dispatch, you can get a call one o'clock

in the morning. If it's commercial

contract, you know, hey, I have a leak

and you have to go find somebody to go

fix it or you're going to lose this

contract. So, this is about lifestyle.

If you have a dog hotel, it's a great

business. I mean, absolutely

unbelievable. But a it requires a lot of

investment because you have to build it

out. You have to have a real estate. you

have to, you know, buy all the equipment

and everything, put the cameras, but

then if you don't have enough employees,

if they did not show up, uh, New Year's

Day, uh, somebody needs to go and feed

this dogs. So, it's probably going to be

you as a business owner 3:00 in the

morning, you know, getting a call that,

you know, three of your employees did

not show up and they have to go and, you

know, feed the dogs on New Year's Day.

So you just have to understand uh what's

involved. But will you make more money

potentially with this business? Of

course you will.

Gotcha. Okay.

Now make the pitch for yourself, I

guess. Um talk about talk about using a

franchise broker. Um the the pros, the

cons um versus just going to a

franchiser's website and clicking apply.

Why do why would somebody use a broker

or do are there certain franchises that

have to go through a broker? Talk about

that a little bit.

Not all franchises have to go through

the broker. I mean, if you call

franchises directly, they'll appreciate

it more because uh uh if they work with

the broker, they will have to pay us

commissions. That's how we are getting

paid. Look, I mean I sell many

franchises for bookkeeping through

brokers and then I have to give the

biggest part of franchise fee to a

broker. But I know without them people

would not probably figure out uh u you

know that bookkeeping even exist. Can

you go on your website I mean on the

website directly and look? Absolutely.

But most of the people don't know what

they're looking for when they want to

buy a business. They want to let's say

get out of corporate America. They have

no idea what they want. So the a good

broker talks to them and gives them

options and through many meetings we

usually come up with many two to three

meetings we come up with several

industries and let's say just search I'm

doing right now somebody wants to do

senior care. There are 20 different

franchises that are available. Okay. So

somebody has to go and check if all of

this 20 available in the city what the

investment are and everything and then

some franchises for example are not

available in the state of California. So

there are probably more than 20 but you

know only 20 are available for example

and then if somebody wants to do it

themselves they have to what go search

all the franchises call or email

individually from all of them request

the documents ask are you available in

the city I mean that's going to be a day

of work versus if they talk to me I'll

get them all this information and yes it

takes us time not a day but it takes us

time to get it but it's again it's

opportunity cost people leave their life

and waiting for us to tell them, "Hey, I

have the research ready." And usually

with the senior care, we're also going

to get them a couple couple other

businesses. So, I'm working with

somebody in Los Angeles right now. They

want to do pet services. It's very hot

business right now. But in the part of

LA where they want to have a business,

there were only three or four that

available out of 40 that are available

on the website because, you know, people

already had it in LA. So, it's just not

available. you have a protected

territory. Like for example,

bookskeeping. I have a franchisee in

Miami. I'm not going to and I cannot

legally sell another franchise in Miami.

I can sell it in Fort Lauderdale, but I

cannot sell it in Miami. So, that's what

brokers do. And again, if you know

exactly you want to buy McDonald's uh

franchise in Fort Lauderdale, then go to

McDonald's website where you're going to

learn that it's not available because

you know the entire United States is

pretty much sold out. But if you do

know, you go and you um actually contact

this franchiseor. But most people don't

know. Even if you know your dream is

pizza franchise,

there are too many of them. Again,

people like Domino's, you know, Papa

Jones and such, they are not available.

They sold out pretty much for the entire

uh US. So, your option is to pretty much

buy the existing one, but most likely

one person, what company owns the entire

city, okay? They of you know, God knows

how many location. So, okay, you want to

have a pizza. How many pizza franchises

out there? Are you going to contact all

of them to find out if it's available in

your area? What the difference? We're

given a spreadsheet that shows the

investment, how many units they have,

you know, uh what are pros and cons. So,

we're doing all the lab work again for

absolutely free. It's absolutely free.

If they end up not buying, then you

know, we're not make a penny. But I'm

going one step further from that. I'm

actually sharing my commission with part

of my commission with uh candidates. So

they get a rebate and also I'm we're

paying for 9 months of the sales

training from our own pocket. So same

sales training that all books keeping

franchises are getting that is about

$5,000 value. I'm giving it to anybody

who buys their franchise through main

entrance through me just because I

believe sales is very important. I'm

like I'm writing a check. Here it is as

a gift. You'll get a rebate and also you

get 9 months of live sales trainer

working with you, teaching you how to

sell, how to do networking, how to

become better and potentially get more

clients. Or you can pay $5,000 on your

own. It doesn't cost you any less or

more. It's illegal for franchiseor to

give you discount because you come to

them directly. It does not exist in the

industry. Everybody has to pay the same

price.

Gotcha. Okay, that makes sense.

From the franchiseor perspective,

is there is there benefit to

um if I'm a franchisee going through you

as a broker, does that make it easier

the application process or is it you

coaching me that's going to add make it

easier? You preparing me for this is

what they'll be looking for. These are

the you know, this is how you make

yourself attractive. How's that work? A

good broker like in any industry, yes,

that's that's what they are doing. Uh a

mediocre broker just creates a problem

because they don't educate the

candidates. And you know, we do get

people like that. They come in and

absolutely

uh all we got from brokers like, "Hi

Max, this is Barrett. Barrett is in DC.

He wants to buy, you know, bookkeeping

franchise. Buy and then if we do all the

work." No, literally it happens uh quite

a lot. We do all the work and then we

get an invoice from the broker like hey

here's my commission and legally I have

to pay the commission and I'm paying it.

But broker did absolutely nothing. The

worst part if you find books keeping

yourself you come to a broker and say

hey I was thinking about bookkeeping. Oh

let me contact them. And they just do an

introduction and that's it. So that's a

mediocre or let's say bad broker. But a

good broker definitely educates. But the

way I look at it, bookkeeping is with

most of the major brokerages in uh

United States, franchise brokerage,

which is a little bit different from

business brokerage. It's just different

uh system. But um I'm fine with that

because most likely people would not

know about us because they coming to a

broker and talking to them. Well, I

don't know what to do. Oh, have you

considered opening your own accounting

company? They provide you staff. They

provide you with clients. And they give

you three months of accounting training,

six months of no minimum royalties, 9

months of sales training, and 12 months

of executive coaching. We also give him

an executive coaching. My co-founder,

who is, you know, now my ex-wife who

started the landscaping businesses,

she's still, you know, a big part of the

business and we're doing it together.

She has a PhD and she works with

companies like PepsiCo and other big uh

companies. She offers the same level of

executive coaching to all of our

franchises and employees for free. So if

you take the uh

value of all the training we provide,

it's more than the franchise fee that

that we charge. So um training again

it's a huge thing but um I want to give

this training to the good candidates. So

that's why broker is important element

but again as in any industry there are

good brokers there are not such good

brokers.

Gotcha. Okay.

All right. Um I Max this has been a very

informative conversation. Franchises is

not something I've dug into before on

the podcast um or even personally. So

thank you so much for educating my

audience. I appreciate it. Um, before we

jump into the lightning round, is there

anything else that I've forgotten to ask

or that you wanted to add?

Look, the way I look in life, I had a

lot of people on the way that gave me

advices and I always listen to what

people have to say because ultimately

I'm the one making decisions, but I want

to have different options. I don't mind

to talking to to somebody like look if

it's somebody like we working with uh

young people who are getting out of

college and like well why am I going to

go and work for somebody when I can

actually buy a franchise and have a

become a business owner at the age of 22

23 and I'm like this is great why it

didn't cross a lot of people's minds you

know 20 30 years ago because everybody

had to pay their dues like look that's

everybody expected you go to law school

or you become a CPA you work you know 15

hour days for few years and then slowly

become a manager they become a partner

times change so just look I'll talk to

anybody anybody who is interested just

reach out just go to

franchisewithmax.com

and you know fill out the form depends

what you want to talk about and let's

talk and it doesn't get anywhere but I

can help somebody to change his or her

life I'm I'm I'm I'm happy I'm happy to

do that. And again, there is no charge

for for my services. The only time we

charge if we actually do uh anyone and

of course another thing that we do, we

help businesses to franchise if they

never franchised. Uh I mean, if they're

business like you mentioned and they

want to become a franchise, you know, we

go through that. I went back to

university and got my certified

franchise executive. So, I actually have

education in franchising on top of the

years of experience.

Gotcha. Okay, great. Anything further,

Max?

No, no, I appreciate the opportunity.

It's been a lot of fun, there.

Okay. All right. Uh, it's time for the

lightning round. Uh, so the first

question of the lightning round is, um,

coffee or tea, and how do you like it

prepared?

Coffee, uh, espresso, double, black,

probably five or six a day. Uh, I

absolutely hate just the regular coffee.

And sorry, I'm going to say it. I'm an

American. I hate American coffee. Okay.

So, if somebody offers me just the

coffee in this glass jar, I'm not going

to take it. I'll take tea. So, it has to

be an espresso machine. Has to be the

real real espresso. Has to be double and

flat

pie or cake. And uh do you have a

favorite kind?

Uh cake and it has to be Napoleon. So,

um it's whenever I travel and I do try

to travel a lot. That that's my hobby.

Absolutely. But one thing we haven't

talked about, I believe that uh life

goes before work. It's not work life

balance. It's life work balance. So I

travel, I go to a lot of countries, I

teach my kids to go to different

countries. I take them with me. Uh so

anywhere I go, if they have a Napoleon

on the menu, I'm going to get it. And uh

that's absolutely my favorite cake.

Great. Um what's a common belief among

entrepreneurs that you would challenge

that if you are

entrepreneur you are automatically rich

and you automatically leave the life. Uh

we are all striving to do that. Remember

when you entrepreneur you're the last

person to get paid. So, if the money

left in the business, you're getting

paid. And sometimes payoffs are huge.

But if you're going through uh

struggling,

um you're not going to get paid for a

while. And look, not every business is a

success. A lot of them are failures, but

you know, I believe that uh without the

failures, you can succeed.

Great. That's great. Um, what's your

favorite holiday and why?

Um, my favorite one is New Year's. Uh,

back in the Soviet Union, we did not

celebrate Christmas for obvious reason.

I mean, it changed now, but you know,

again, I haven't been there for living

there for many, many years. Plus, you

know, Russian Christmas or, you know,

Ukrainian Christmas is after New Year's.

It's 2 weeks after Catholic Christmas.

So really New Year's everybody was

waiting uh for this holiday. We didn't

have a Christmas tree. We had a New

Year's tree and you know as a kid we had

you know long winter break and then

there were always gifts and there were

time to spend with your friends and it

was snow. Uh where I grew up we didn't

have a lot of snow because it was a warm

weather relatively but when we did it

was a huge uh thing. So I still remember

the uh smell of the winter living in San

Diego. We don't get much snow, but uh

I'm actually trying to go to a cold

climate uh almost every year around

December or January just to experience

that because I absolutely love that and

if there is snow, I'm going to be like a

little kid. I'm 50. I'm going to be

outside just, you know, like touching

the snow. So, I still enjoy it a lot.

That's great. Um are you a do you

consider yourself a morning person or a

night person? And do you have a

preferred routine?

So I was uh a night person. I was going

to bed late. I was waking up late and

then I changed myself during co I just

said you know what I'm missing out

because uh you know why a lot of

successful entrepreneurs are waking up

early. Why don't I try? And I made

myself wake up at 6:00 in the morning

every day and I'm doing it since. Um,

I'm letting myself sleep in a little bit

on the weekend, but now my body is

saying, "Well, you're about to wake up.

I mean, it's time." So, if I sleep till

7, that that's wonderful. Even when I

can and sometimes, you know, it's bad,

but now I'm um definitely a morning

person and I get a lot of stuff done.

Okay. And my routine is um I'm

journaling twice a day. It helps a lot

to get your head straight. This helps

helps me. So when I wake up, I journal

like what I'm going to do uh today, what

I'm grateful for and such things. And

then I'm also journaling at night. It's

not long. I'm not spending hours, but

you know, it's 5 to 10 minutes twice a

day. That absolutely helped me. I

started doing that few years ago and it

changed my life.

Great.

Um what's one thing that you would want

your successor to remember you for?

my sense of humor. Uh I want them to

remember that um you know when you smile

life is easier and uh people are the

ones that make uh life difficult and

it's not worse that you know life is

short live it up. Again it's a cliche

but I'm doing it all the time. So I want

them to remember for

who I was. I mean, and probably not not

judging me because, you know, one of the

things that I go by, I am who I am and

I'm not going to change.

I I want to clarify. You just said

people did I get this right? People are

what makes life difficult, but that's

not worse. Is that

No, no, what what what I said, people

make life difficult. People just, you

know, over complicate things. Like one

of the things that I say to everybody

like don't over complicate it. It's

probably one of the strengths that I

have or it's called unique ability that

one of my unique ability is to be a

simplifier. So I'm simplifying

everything. So any problem that you

think it's a problem, if you look at it,

if you spend enough time thinking about

it, you can make it simpler and you can

find the solution way way way easier.

Gotcha. Okay, thanks for clarifying

that. Um, where are you finding

creativity right now?

Just spending time outside of work. like

um with being a CEO of three businesses,

I probably can stay at my desk for um 18

hours every day and I still got to find

things to do, but I'm actually making

myself to turning off the computer to go

to gym and you know, not to work on the

weekend. So I'm very, you know,

religious about taking my free days, the

days that, you know, are just for me, my

family, my friends, and for my mental

health. So I can just uh that's the

creativity doing beach walks. I love to

travel. uh one of the best places for me

to think and to become creative is

actually airplane and with uh offices in

many countries and employees in many

countries and franchises all over the

US. I'm traveling a lot and then also I

love to travel for vacations uh with my

friends. Uh so we uh whenever I'm on the

plane I have my noise uh cancelling

headsets and I'm just thinking sitting

with my you know iPad and just writing

things down. So that's where I get

creative and you know just

couple vices that you know work for me.

It's uh scotch and cigars.

All right. Um Max, what do you have

coming up in the next year or so that's

got you really excited?

I have a goal to uh triple the number of

franchises that we have right now for

bookskeeping and also

uh build the pipeline for the brokerage

business so that grows uh as well. And

the way I'm planning to do it is by

thinking outside of the box. And that's

the most challenging thing is to figure

out what everybody else is doing and

figure out a different way of how it can

be done. Because look, if I just follow

the system, I'm just not enjoying

because it's also

about the enjoyment. It's about how how

to get it how to get it done and and

what to do. And again, I have several

travels coming up. I'm always going to

see new countries. My goal is to see

five to six new countries every year.

I've been to three new ones so far and

then I I'm on track to see three more

before the end of the year. At least

three new ones.

Wow. Okay, that's great. Um Max, I know

Franchise with Max is going to be the

answer, but uh where else can people uh

can people find you, hear more from you?

I mean LinkedIn. I'm posting all of the

articles there. And uh uh either that or

franchisewithmax.com

there would probably be two two things.

Uh I'm not huge on social media. I mean

I am on on Facebook to certain extent

for the business. But personally just

this is just for me to stay in touch

with my close friends. But you know

LinkedIn and franchisewithmax.com would

be the two thing two two places to find

me.

Great. Yeah we'll link those up in the

show notes for sure. Um, well, Max,

thank you so much for just informing me

and educating me on franchises and and

this conversation. I've really

appreciated it.

Barrett, thanks for for the opportunity.

I really, really enjoyed it.

You've been listening to the Art of

Succession podcast with your host,

Barrett Young. Twice a month, we'll

bring you interviews sharing the

successes and challenges from business

owners with their own succession

stories. The Art of Succession is

sponsored by GWCPA and is provided

forformational purposes only. Before

engaging in any transaction, you should

consult your own adviser.