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1:51

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1:53

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1:55

its business model, its competitive advantages,

1:58

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2:02

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2:04

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2:07

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2:17

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as a basis for investment to live

2:29

in. Welcome

2:31

back to Business Breakdown. Today

2:34

we explore a major player

2:36

in the reseller economy that

2:38

is Windmark. You're likely

2:40

familiar with some of Windmark's brands like

2:43

Plato's Closet or Play It Again Sports

2:45

but together Windmark operates five brands

2:48

through a franchising model. Our

2:51

guest to break down Windmark is the

2:53

current CEO, Brett Hefface. Now

2:55

we listen to our audience and we try to

2:57

be cognizant of the guests we invite. The

3:00

overwhelming majority of

3:02

our audience prefers investors to management teams.

3:05

So why did we explore this episode with Brett?

3:08

Well Windmark doesn't host conference calls

3:11

and their investor relations are generally

3:13

limited to financial reports, some

3:16

very basic management commentary and

3:18

some rare public appearances. That

3:20

alone was intriguing to us but I'd

3:23

add when we talked to Brett

3:25

it was very clear this was

3:27

not an investor relations exercise. So

3:29

during our conversation we get into

3:31

the broader reseller economy, the dynamics

3:33

of managing those brands and different

3:35

franchise brands and how Windmark

3:37

approaches this and thinks about growth. In

3:40

the back half of the conversation I also

3:42

made sure to talk to Brett about his

3:44

thoughts on capital allocation, focusing the business and

3:46

yes on investor communication. Windmark

3:49

has been a very interesting business to

3:51

me, so if you're looking to learn

3:53

more on top of the episode, don't

3:55

hesitate to reach out, send me a

3:57

message, email, social media, whatever you prefer.

4:00

Now please enjoy this breakdown of

4:02

when markets. Are

4:05

I bread excited? Abby here on

4:07

business breakdowns. We have gone into

4:09

the world of franchising before, but

4:11

I think when Mark sits in

4:13

a very unique category in the

4:15

resale market that we certainly haven't

4:17

covered. An. Addict gonna be of

4:20

interest to our listeners. I thought we

4:22

could just start out with an introduction

4:24

on when Mark. It's not a

4:26

thoroughly a household brand. I think some

4:28

of it's franchises our household and so

4:30

maybe you could just pick us up

4:32

there with an introduction to the business.

4:35

Sure, Thanks Matt! Really appreciate the in

4:37

on the podcast today mean we talk

4:39

about. When. Mark Where when Mark

4:41

the resell company and We believe

4:43

Where the resell Company. So we're

4:45

responsible for a network of. One.

4:48

Thousand, Three Hundred and nineteen locally

4:50

owned by and centers in communities

4:52

all across North America. And we

4:54

have a very simple and pure mission

4:56

to provide resell for everyone. And

4:59

we do have Fi brands. We are more

5:01

well known for the individual brands. Like you

5:03

said, they're Plato's Closet which is Tina Peril

5:05

in that's our largest. Once. Upon a

5:07

Child which is children's apparel and Hardgoods.

5:09

We have a pretty big sporting goods

5:11

business and played against sports and then

5:14

we have Style On for which is

5:16

men's and women's apparel and music around

5:18

which is musical instruments. Are. Focus

5:20

as a company is on value

5:22

oriented items. So. Think.

5:25

Walmart. Target, Carter's Old Navy,

5:27

Adidas, Nike, Under Armour. These are the

5:29

brands and the items that really sell

5:31

well in our stores and the brands

5:34

that were buying from our consumers every

5:36

day when they come in to the

5:38

door. So we provide access to quality

5:40

use products at value. pricey And the

5:42

thing that's so interesting is these lower

5:45

priced items. They have less places to

5:47

go when you're done with them and

5:49

unfortunately day and up in landfills. So

5:51

as a result the this focus. We've.

5:54

Been doing this for over thirty five years when

5:56

marks been a leader in the circular economy. And.

5:58

Our environmental incoming. the impact

6:00

is absolutely massive. We've. Kept

6:02

one point seven billion items out of

6:05

landfills since two thousand and ten. And.

6:07

Have returned over a billion in cash

6:09

to the communities we serve in the

6:11

past twenty four months along. And. I

6:13

think the last piece of this is our

6:16

resell business delivered through a franchise model. Matt.

6:18

We. Don't have any corporate stores. And.

6:21

We think that franchises the appropriate model

6:23

for the resell industry. I'm

6:25

certainly familiar with your brand's played again

6:27

fourth being one major and I think

6:29

I will be increasingly familiar with the

6:32

Rams as I have young children growing

6:34

up and those close as he mentions.

6:36

There's. A lot of use for them and then

6:39

they have nowhere to go. And I

6:41

want to get into that resale market

6:43

a bit more. It is interesting as

6:45

a referenced circular economy, which I like

6:48

that phrasing their. Can. You just

6:50

share a bit more about what that economy

6:52

looks like. I think it makes all the

6:54

sense in the world that we should be

6:56

focusing on that more and more as consumers

6:59

are just a little snapshot of it as

7:01

you seem like your key player in that

7:03

space. and how you would if you can

7:05

quantify that, market, sizing any the dynamic that

7:08

have gone on in terms of the trend

7:10

there, it's something that I think is increasingly

7:12

important, but maybe not talked about nearly enough.

7:15

When I joined when mark over twenty one

7:17

years ago, I don't even think the word

7:19

resale was a term that was being used.

7:22

We thought of ourselves as a franchise or

7:24

of concepts that buy and sell gently used

7:26

goods. But over the years the business has

7:28

evolved, the markets evolved, and there's been alive

7:31

new entrants. All. Of these things

7:33

combined have really. Dramatically.

7:35

Push the industry forward. There's. New

7:37

estimate that come out every year. Frankly, sometimes

7:39

they're hard to believe. But. The most

7:42

recent numbers that I reviewed. Were.

7:44

At Us second hand apparel market of

7:46

over forty billion, with Resell accounting for

7:48

twenty three billion of this. We

7:50

also participate in Canada, and then we

7:53

participate in sporting goods musical instruments. There's

7:55

not much data around those categories,

7:57

but they're also very, very large. Markets

8:00

for previously used items. So in

8:02

the past, if you look at

8:04

the history, the growth of the

8:06

market was really driven by younger

8:08

people, by early adopters and value

8:10

conscious consumers. But it's pretty clear

8:12

now that there is just very

8:14

widespread participation in this market. And

8:17

a recent study that I reviewed.

8:19

Shared that over fifty percent of consumers

8:21

shop second hand apparel, and twenty twenty

8:23

three, so it's very wide in terms

8:26

of participation. There's a few

8:28

other things to touch on about the

8:30

variety of the business models. I think

8:32

it warrants some discussion because not all

8:34

resell companies are created equal. And.

8:36

We've defined a very specific.

8:39

Positioning. In the industry I

8:41

mentioned earlier we believe where when mark

8:43

the resell company because true resale is

8:45

what we do. Our stores buy and

8:47

sell used items on a daily basis

8:50

and we believe were the only company

8:52

doing this scale. So. What that

8:54

means as we pay you cash for

8:56

your idols and on average each store

8:58

paid out over four hundred thousand dollars

9:01

in cash. To customers in the

9:03

community that over eleven hundred dollars a day

9:05

their pain out. We. Focus on

9:07

the value and of the spectrum. And

9:09

that's why we're set up the way we

9:11

arc, as we can actually buy and sell

9:14

low priced items. Profitably. For

9:16

our franchisees and we think that for those

9:18

class of goods. Is the most

9:20

sustainable option. National. Packaging: There's no

9:22

shipping, their no robots moving around the warehouse.

9:25

And more importantly, The. Goods get shipped

9:27

in the community once and they stay there.

9:29

There. Are a variety of other models. Some.

9:32

Of them are very different than ours. Consignment

9:34

is a big one. That's. A concept

9:36

that we get confused. Sometimes people think work

9:38

and Simon company or. But. Confinement is

9:41

a big area and that's where the players

9:43

in the marketplace. They're not principles their agents.

9:45

so you'll see companies touting terms that as

9:47

take great or G M V or other

9:49

metrics. And when you hear company saying that,

9:51

it just means that they don't take ownership

9:54

of the inventory and there's less certainly for

9:56

the consumer. You bringing your kids close to

9:58

our store will tell you. We.

10:00

Want To Buy it? We don't want to

10:02

buy it. Here's the price, so it's very

10:04

clear the other models just don't provide that

10:06

certainty. And. To be clear, the very

10:09

valid models. They're more prevalent than ours. Frankly,

10:11

they're just different. There's. A donation

10:13

model out there. Every in the states

10:15

at least knows about Goodwill or Salvation

10:17

Army or Sabres. It's a very different

10:19

business model because they're not paying for

10:21

their inventory, they're getting it as a

10:23

donation. But it's also very good for

10:25

the environment as they handle huge volumes.

10:27

And then there's a peer to peer

10:29

business. Think. About Facebook Marketplace.

10:32

Posh. Mark Evade. That's when you do the

10:34

work on your own. You're going to list

10:36

that item yourself. Typically. Better

10:38

for higher priced items. Because. You're not

10:40

going to take the time and energy to do that

10:43

for two or three dollar item. And. Then

10:45

brands themselves are starting to get into

10:47

this as well because when Europe brand

10:49

a branded apparel company unbranded sporting good

10:51

company you make it, doesn't you make

10:54

quality items that have a long life.

10:56

right? Now they're only getting. Run.

10:59

Him ration one time when it gets

11:01

sold so all the brands are trying

11:03

to figure out how do I participate

11:05

in the Second, third, and fourth time

11:07

the good traded hands and we started

11:09

some sustainability partnerships in the sporting a

11:11

business with Rawlings Baseball with Ccm Hockey.

11:14

And. In the disc golf business with

11:16

a Nova and he on skis and

11:18

were able to showcase these brands. As.

11:20

Sustainable option so they feel good about.

11:23

Working. With us and consumers feel good about

11:25

shopping? Let them. A. Major competitor

11:27

though. And. I still think the

11:30

biggest competitor to us is the landfill.

11:32

Is still too many people. Just.

11:35

Don't. Take. The time.

11:37

To. Pursue one of these options are they're

11:39

not aware of these options. I think the

11:42

industry needs to be very. Focused.

11:44

On been more convenient so that

11:46

more customers can responsibly dispose of

11:49

their items. You. Pointed to

11:51

of interesting differentiation point for your business

11:53

versus the rest of the industry and

11:55

that is that you take ownership of

11:57

the items you put the cash out.

12:00

I'm. Wondering how do you work

12:02

with your. Franchisees.

12:04

In order to make those purchasing decisions,

12:06

can you just kind of bring us

12:09

into the store experienced that is managing

12:11

risk in some ways in terms of

12:13

putting cash out and ensuring that you

12:15

can then resell that item on the

12:17

back? And how is the system set

12:20

up such that you can educate your

12:22

franchisees in the business owners in order

12:24

to do that effectively? Believe. In

12:26

developing a on a cell system for.

12:29

Over twenty years. And. That pricey

12:31

matrix in terms of what you pay

12:33

is inherent in that point of sale

12:35

system. If. We wanted to. We

12:37

could teach you how to buy under thirty

12:40

minutes. It's that easy. So. We look

12:42

at the style, the brand, the condition, and

12:44

they're sort of standard retail price points that

12:46

we know consumers want to hit. So with

12:49

a few touches of the touchscreen, it really

12:51

points out. What? To pay for

12:53

the item and what the item will sell

12:55

for so it doesn't need a big team

12:58

of data scientists. It's really not that complicated,

13:00

but it's a ton of brands, It's a

13:02

ton of price points and it's all organized

13:04

really easily for the franchisee. and now we

13:07

also support the franchisee with training with style

13:09

and trend guides. What? To buy

13:11

what not to bike is there is fashion

13:13

components at us and we do our best

13:15

to stay on top of those and also

13:17

to continually communicate with the franchisees about what's

13:20

working. We have a very good understanding of

13:22

what brands are selling, what brands are not

13:24

selling and passing that through the system. And.

13:26

To the franchise's ultimately have

13:29

the decision making. Capabilities.

13:31

Such that. When. It comes into

13:33

items were three are more fashion oriented

13:36

they can make the decision are there

13:38

guard set up because it is the

13:40

tight relationship where you both rely on

13:42

one another. And I just curious how

13:45

much we way they have when it comes to

13:47

those decisions. All the purchasing decisions at

13:49

that point of attack or the franchisees so it's

13:51

one hundred percent there's we have the system in

13:53

place, we train them how to do it, but

13:56

ultimately they make the call on what to buy

13:58

because it's their capital. It's really easy. The the

14:00

City or and say. By. This by that

14:02

but it's not my capital is there so

14:04

they take that responsibility very seriously. The worst

14:06

thing we can do for a customer's turn

14:09

away and item that's a quality item. Because.

14:11

Then they lose confidence in that store

14:13

in that location. So our stores really

14:15

wanna buy everything they can. We train

14:17

them to want to buy everything they

14:19

can. But. Sometimes they can't. How

14:21

you communicate that to a customer, a really important part

14:24

of the training because we don't want people to feel

14:26

bad we're. Judging. The quality of their

14:28

items or their lifestyle or anything. were just

14:30

saying hey this particular item isn't gonna sell

14:32

well in our stores today so we're not

14:34

can be able to purchase it. And.

14:37

Is all of the inventory than managed I

14:39

assume at the local level as well? Oh.

14:41

Absolutely Absolutely. That's one of the keys

14:44

of our business model of America. Meets

14:46

The reason why I think franchising is

14:48

the right model for this business is

14:50

because. Each. Stores pain out. that

14:53

for eleven hundred hours a day is

14:55

their capital. They're hiring the people. And.

14:58

When they by when they have excess inventory,

15:00

they need to figure out how to clear

15:02

it. And we help on with that. It's.

15:04

Is network. You're not on your own when

15:06

you're in the local market because you have

15:09

thirteen underneath the other colleagues all around North

15:11

America. But. Sometimes they feel like they're

15:13

along. And. That's. The give

15:15

and take have been a franchise or in a franchisee.

15:17

I don't think this would work at a corporate level.

15:19

The have a bunch of corporate employees china. Commit

15:22

Capital on behalf of the Mothership. Know.

15:24

I certainly agree with you there

15:26

some unique aspects to skyn in

15:28

the game and allowing that decentralized

15:30

management while also having the centralized

15:32

education system and everything that goes

15:35

into that. Maybe we can transition

15:37

a little bit into the business

15:39

model itself. I understand there's kind

15:41

of a royalty stream that comes

15:43

up. But. When you think about. Operating.

15:46

The business. He described how many franchises

15:48

you have, how would you walk through

15:50

the business model and any important components

15:52

to it when you're thinking about. There's.

15:55

A couple things I think the one thing that. We.

15:57

Need to do better job as company is. Our

16:00

customers are families, their individuals. In

16:02

the apparel business, we can men

16:05

and women's fashion needs from newborn

16:07

to retiree. If we're doing our

16:09

job right in the community, we can acquire

16:11

you as a newborn customers and keep you

16:14

for more than fifty years. The. Span

16:16

of it doesn't really get talked about all

16:18

the time, but it's really impressive in terms

16:20

of there's not many businesses where you can

16:22

keep a customer for that long. Maybe.

16:24

It toothpaste, a consumer products, or some like

16:26

that. But in our world, there's really not

16:28

that many out there. So if you think

16:30

about the business model, The. Vehicle for

16:33

which we provide our services is franchising

16:35

and at it's most basic level, think

16:37

of it as like up distributed system

16:40

of locally on buying centers. I touched

16:42

on that before. All we want

16:44

our stores to do is advertise. Bring.

16:47

Us your gently use items and will pay you cash on

16:49

the spot. And. If you treat him well.

16:51

If. You're fairview, evaluate the items you pay them

16:54

cash for the things that will sell well in

16:56

the store. If you communicate why we're

16:58

not purchasing the things we can't purchase and

17:00

you educate them on how it all works.

17:03

They. By also and they buy a

17:05

lot. So. We by the him

17:07

and tory. Those. Goods get put on the

17:09

shelf. And they get sold for

17:11

like fifty to eighty percent off a regular retail

17:14

for the comparable new products and customers by a

17:16

lot of at one point six billion almost in

17:18

sales. Last year alone. So. It's a

17:20

really straightforward model. We're. I

17:22

mentioned alignment before, but we're a

17:24

hundred percent. Aligned. With

17:27

our franchisees, the only way we're successful

17:29

at when Mark is if they're successful,

17:31

there's no possible way for us to

17:33

be successful without them being successful. Because

17:36

as you reference, Are. Only

17:38

meaningful form of compensation are those

17:40

continuing fees based on sales. So.

17:43

It's very powerful because what it means

17:45

is that our entire company is focused

17:47

on supporting the franchisees. We. Don't

17:49

have any locations. any corporate locations

17:51

to China. Change our focus. And.

17:54

When you're all about teaching

17:56

and training and support. You.

17:58

Really approach things differently. Because.

18:00

I can tell you that every employee at

18:02

this company comes into work every day trying

18:04

to answer one question. How can I help

18:06

the franchisees get better? That's. All

18:08

we care about. We. Completed

18:10

over three thousand support visits last

18:13

year, and that's why. We. Had

18:15

a ninety nine percent renewal rate last year and

18:17

we had our eyes level system I'd sell. So

18:19

the business model. Is. Pretty straightforward, and

18:21

that's about it. The. Description there

18:23

in terms of how you're bringing

18:26

customers into the store to buying

18:28

items. We talk a lot about

18:30

unique customer acquisition strategies. And

18:32

it's definitely one that fits into their. It.

18:34

Ultimately turns into a positive Jack in a

18:36

lot of ways. Where. You get that

18:39

inventory on hand. Are there any data points? Just

18:41

in terms of. What set of

18:43

the customers are both selling and

18:45

buying? I would imagine that a

18:48

large percentage or on both sides of the

18:50

transaction overtime. Yeah, time. I mean

18:52

it varies by brand but your well over

18:54

fifty percent. Well. Over fifty

18:56

percent are both and that's the sweet

18:58

spot for us. I don't believe. That.

19:01

Any one is gonna only by

19:03

used or only buy new on

19:05

the end of the bell curve.

19:07

You have people doing that today.

19:10

Some. People still won't buy new and

19:12

there are emerging people lot influencers

19:14

on Instagram that are only buying

19:16

previously used but the middle two

19:18

thirds of the bell curve today.

19:20

I think for quite some time

19:22

are going to be hybrid users.

19:25

Year. Earlier point on maintaining

19:27

a customer through their entire

19:29

life. That. Journey. As

19:32

you have it set up

19:34

now, each of the franchise's

19:36

have their separate brands. Is

19:38

there anything that you do

19:40

strategically to allow that natural

19:42

evolution to keep the customer

19:44

jumping from franchise? the franchise.

19:47

That's. Harder to do on a national

19:49

level. Mad if I could wave my

19:51

magic wand. I'm open to gotten had

19:53

hits for a I'm I'm open. It's

19:55

more about. The. Newborn comes into Once

19:57

upon a child they had twelve or thirteen. They

19:59

go over to play the guy that they hit.

20:01

Twenty five to thirty they go over to Style

20:03

Encore. It's. A more about. Been.

20:06

In the community that has all three. So.

20:08

We're not there yet on a master plan to

20:10

do that, but. It's. Just naturally occurring.

20:12

But they are. I'm really open any thoughts

20:14

Schumi Attacks which I only have a question

20:17

that I have I uttered by Valve is

20:19

Matt Audio F O's fair? You'd need to

20:21

have the places at the very least. When.

20:24

You look at the franchisees. Do

20:26

many of them own several franchises?

20:28

What does it look like in

20:30

terms of owning multiple franchises? Yeah,

20:32

I mean there are. We have

20:34

about nine hundred and forty franchisees

20:36

at this point in time, and

20:38

we have. At the

20:40

end of the year mean the actual number

20:43

was one thousand three hundred ninety. Location: So.

20:45

It's. About one point four as the number,

20:47

but our mode is one. And

20:50

we really like multi unit owners.

20:53

But if they can handle the second store

20:55

and the third store. So we have a

20:57

very. Cautious. Night

20:59

and cautious as is prudent model. That.

21:02

We're not gonna work with the on the second door

21:04

until the first doors working right? And. When

21:06

I can add the second store unless you have

21:08

an operational plan. To. Have the second store.

21:11

Because. If you don't have another strong

21:13

manager or a strong relative. Or

21:15

strong partner. In terms of operations, both of

21:17

em are going to go down so. Yeah.

21:20

We like multi unit owners, but our

21:22

mode is clearly one here, and that's

21:24

also something that's unique. Without. When

21:26

Mark is, there aren't a lot of franchise concepts out

21:28

there were you can. Be. Successful with

21:30

just one concept and you can hear

21:32

and so few want seconds or great.

21:34

We work people all the time but

21:36

we don't sign. Territory. Deals.

21:39

You're. Going to develop fifteen stores in a

21:41

market over a period of time, we've

21:43

dabbled with that over the years. It's

21:45

been a complete an unmitigated disaster for

21:47

us every time we've tried it. So.

21:50

We're just. Slow. And Steady wins the

21:52

race. Is. Our view. Curious

21:54

twist on what didn't work out

21:57

with the territorial large. Build.

21:59

Out. That. More. Institutional

22:02

capital that was coming in

22:04

that maybe didn't have that

22:06

same high touch neighborhood type

22:08

approach. Was. Or anything else that

22:10

made that results in a failure. Yeah,

22:13

I mean some of this predates

22:15

me, but. Some of

22:17

it occurred on my watch candidly,

22:19

and the sub that predates me

22:21

his entire state was granted to

22:23

someone. and then if they don't,

22:26

Develop. On schedule or they're

22:28

operating stores that are below system

22:30

average. It. Ends up hurting the brand

22:32

and you think it's exciting when you sign

22:35

him off because you can tout new agreements?

22:37

But new. Agreement that don't open

22:39

or new agreements that. Produce.

22:42

Below system average Farm everybody

22:44

Not only they harm. When.

22:47

Mark But they harm all the other

22:49

franchisees so. We. Lock that all

22:51

down. Candidly! Matt we get criticized

22:53

sometimes because people want to grow faster and.

22:56

I guarantee you there's not a

22:58

person in North America get that

23:00

wants to grow faster than me.

23:02

I can guarantee that. But.

23:04

We've also seen the downsides of

23:07

making bad decisions on picking franchise

23:09

partners that aren't qualified. And

23:11

I look at these people in the eyes.

23:13

We have a Discovery Day every other week.

23:16

I'm. I'm it almost every single one of them

23:18

and we talked to him and we save your

23:20

fall model. You're going to be successful and I'm

23:23

just not going to yield on that. I'll take

23:25

the heat for. The. Growth rate

23:27

that maybe people want they want a little

23:29

higher. But. I want quality and

23:31

you go back to that renewal, right? And

23:33

I'm just really comfortable about how we've managed

23:36

this. Gap. Of the great saying:

23:38

if you default on a million dollar loan, you've

23:40

got a problem with your default on a. Billion.

23:42

Dollar Loan. The banks got a problem and

23:44

I think there's some truth to that that

23:47

could extend into other industries as well. Yeah,

23:49

appreciate the thoughtfulness around back. When

23:51

you're looking at those applications,

23:54

Maybe. We could just. Go. Through the

23:57

lens of what of franchisee

23:59

agree. Looks like. Any.

24:01

Of the key. Data. Points that

24:03

are important into what they look like

24:06

from our length standpoint, what's expected? Any

24:08

of the metrics that you can point

24:10

you just in terms of how those

24:12

contracts work. And. There's a qualitative

24:14

piece that I'd like that just touch on first.

24:17

Because. We get so many leads. Some

24:19

of the lead turn and applications and some

24:21

of applications turn into agreements. It's a. Classic.

24:24

Faunal. But. The screening

24:26

out process. they select out.

24:28

Sometimes we select them out.

24:31

Sometimes it's really focused around

24:33

operationally qualifying and financially qualifying.

24:35

And. On the operational fees we just have

24:37

to get people to understand what the

24:39

actual opportunity as the job itself is

24:41

really complex so we want to uncover

24:43

for them. A This is the actual

24:45

job first. You. The bottle washer.

24:48

You're the Ceo, your everything.

24:50

And you're responsible for financial

24:53

management. You're for marketing. You

24:55

responsible for operations staffing, customer

24:57

service, community relations. So it's

24:59

not for everybody. But. For

25:02

the right candidate, it's an amazing

25:04

opportunity. The. Other key tree

25:06

is. Just. Follow the operating model.

25:09

Lot. A What we do is pretty straightforward

25:11

madam. it's just fall the operating model. We.

25:13

Got thirteen hundred stores. We've been doing this

25:16

for thirty years. We. And

25:18

our franchisees have made every mistake out there.

25:20

So if you fall that operating model. We.

25:22

Think you're gonna have success? So.

25:25

Then you get to the point of some

25:27

of your questions around what's the contract look

25:29

like it's a pretty long legal document. There's.

25:32

A lotta regulations around. While he can say

25:34

in what we can't say state by state,

25:36

it's a pretty complex document, but at the

25:38

end of the day it boils down to.

25:40

We're. Going to license. The. Franchisee

25:43

our brand name. When mark on

25:45

Plato's Closet, we're gonna license you

25:47

the right to use Wales Closet.

25:50

And the franchisees obligation is to follow

25:52

the business system. That. We have

25:54

and a handbook. So. Hopefully they come in,

25:56

we train them, we teach them the businesses, some

25:58

hopefully they follow the business. Them and the

26:00

financial piece of it as. There's. A.

26:03

Weekly. Percent. Of sales that

26:05

we get paid and that's called the continuing fi.

26:07

There's. A few other little things here and there

26:09

are not profit centers for us. That's why I

26:11

feel like this alignment concept is real because it's

26:14

just about that continuing fee and it's really good

26:16

to be able to look some on the eye

26:18

and say. If. You do better. We

26:20

do better. It's. Never a

26:22

situation where you do worse and

26:24

we do better. It's impossible. it's

26:27

impossible for that, the app and

26:29

so it really enhances franchisee relationships

26:31

because everything never perfect. but I

26:33

think that's the contract. It's really

26:36

straightforward. If you wanna talk a

26:38

little bit about some of the traits, Of.

26:40

Successful franchisees I think you mentioned

26:43

that. Yeah, I think

26:45

you'd be interesting. You mentioned maybe

26:47

framing it through be operating manual

26:50

That. If. You follow this. That's.

26:52

Really the path. Maybe.

26:55

Just discussing. You know, if there are certain

26:57

things. bear. That are com in. Such.

27:00

That if people are doing them, that's where

27:02

you often see mistakes are made. Or.

27:04

If they really lean into it, that's where you see

27:06

a lot of the successes and blend that with the

27:09

traits of what makes for. A successful

27:11

operator. Yeah. I mean the

27:13

biggest thing that. Franchisees.

27:15

Sometimes get off the path a little

27:17

bit on. Is. What we would

27:20

call limitations. A lot to him

27:22

and Tories com and and and they feel like that

27:24

the slow down and stop buying for a period of

27:26

time. And we really are all over

27:28

that as a company and trying to help

27:30

educate them why it makes sense and what

27:32

can happen and and more partly how to

27:34

help him. Again, no one's saying we

27:36

don't want to do with your ways like we can't

27:38

for this reason. Okay, then. Let's. Talk

27:41

about how we can help you. And. The

27:43

other piece I would say in that operating manual

27:45

is. Sometimes. People aren't

27:47

spending the unnecessary mount on marketing. The.

27:50

Contract States We talked about the contract that they

27:52

have to spend five percent of sales on marketing.

27:55

That. Are average numbers are a little bit lower

27:57

than that. And. We think that.

28:00

Getting that message out to everybody in the community

28:02

is really important and at a minimum we think

28:04

that five percent of the number and that's what

28:06

they sign up to do. So the limitations in

28:08

the marketing I think are the most common. missing.

28:10

There's a whole host other things that. You

28:13

know lackey. Thanks have people to over the

28:15

years, but those are the ones that are

28:17

Ninety five percent of our time spent on

28:19

helping the franchisees. What? Is. Your

28:21

marketing channel. It's most effective for

28:24

this category. Near. Experience. Right

28:26

now it's digital and social, so

28:28

cost effective to tell your message

28:30

that way. That that is the

28:33

way when I started our stores were doing.

28:35

Cable. Tv that was really effective back in

28:37

the day, and radio and they're still some of

28:40

that. But. Digital. In Social is

28:42

really the most effective, cost effective way for

28:44

the stores advertise. Right now. I

28:46

was wondering about going to get direct mail

28:48

I still appreciate from time to time founded

28:51

upon. The. Individual honor in your

28:53

community. You may. You. May get some

28:55

direct mail but it just goes back to what you

28:57

were taught Matthews like the traits of a successful. We.

29:00

Have. Engineers, teachers, people

29:02

from retail. People.

29:04

From all different walks of life. So

29:07

it's not about. What? Your business

29:09

background is. It's. Do you

29:11

wanna be? A responsible member of

29:13

the community? Do you buy into what

29:15

we're doing? Really from a sustainability standpoint,

29:18

Can. You follow the model. And

29:20

as hard for some people that are very

29:22

entrepreneurial because they want to tweak things, they

29:25

want to try something new and what we

29:27

really try to get people to do is

29:29

just run the model for a few years.

29:32

Just do. It for the handbook and if

29:34

you do it for the hammer and you're starting to

29:36

have a lot of success and you're trying a new

29:38

idea, just tell us. We. Don't sit

29:40

here and Minneapolis and think of the

29:42

next great idea for the store to

29:44

execute. It. The it abject

29:46

failure. If the what was my job

29:49

description. Since. All.

29:51

The best ideas that have happened. At

29:54

the Company in operational ideas and

29:56

local store marketing and. They.

29:58

Will happen from franchise. So

30:01

we see something working and then

30:03

art team and we have some

30:05

really talented employees and really talented management

30:07

team. They figure out what can we

30:09

package. And. Blowback out of the

30:11

system that can impact hundreds and hundreds of

30:13

stores. So that's what our skill set as

30:16

it we're not terribly smarter than anybody else,

30:18

were very disciplined, That's. A really good

30:20

thing to have in this industry. And. We're

30:22

trying to get them the fall the model but

30:24

the other thing that I've been thinking about a

30:27

lot lately actually and I give you credit for

30:29

this. Is. I. Was

30:31

just so intrigued by the podcast

30:33

I listened your Business Breakdown podcast

30:35

on Protect Felipe. And

30:37

I really believe that

30:39

are successful franchisees. They.

30:42

Embrace the notion that our stores or

30:44

legacy assets in the community. Because.

30:46

You act differently as an owner if

30:48

you think what you're doing is permanent.

30:50

It's not just the store that you're

30:52

gonna open and you're going to close.

30:55

I. Wish protect Felipe would license their tagline

30:57

to me. I'd love to be able to

30:59

say like, consider that you never actually. Own.

31:01

A When Mark franchise you merely look after for the

31:03

next generation. I mean that is a. Wow.

31:06

That's a powerful marketing message and it's

31:08

why it truly breaks my heart when

31:10

the store closes. Not because

31:12

of the financial impact the Us. We've

31:14

thirteen hundred stores at once door closing.

31:16

From a financial standpoint, it's not going

31:18

to impact us, but you have young

31:20

families that now. Don't. Have access to

31:23

our clothes which is a problem you have. Couple.

31:25

Going on a date that are teenagers for

31:27

the first time that they want a new

31:30

outfit and they can't goers. Young kids play

31:32

hockey that can't get those new skates anymore

31:34

so that's the piece that were try not

31:36

even amp up even more. We're starting to

31:38

train on this. When franchisees come in for

31:40

new training, we're starting to roll this out.

31:43

For. Existing franchisees. You.

31:45

Own a legacy asset for your community

31:48

and let's make sure that we're being

31:50

proper stewards of these assets. Because.

31:52

It's the community that's really. Benefiting.

31:55

From this a heck of lot more than

31:57

you as the owner or when mark as

31:59

the franchise. The want. To thank

32:01

you for that inspiration for he

32:03

that yeah Inspiring on many levels

32:05

for sure. That podcasts the renewal

32:07

rate that you mentioned before it

32:09

ninety nine percent. plots that speaks

32:11

for itself. I'm. Curious over

32:13

time. A have you have large

32:15

swings in that number? And.

32:18

Anything. In terms of that trend line

32:20

that you watch or monitor very closely. Economically

32:23

be due to macro reasons from time

32:25

to time, but just that number and.

32:28

Obviously you want that to be as high

32:30

as possible to build that description that you

32:32

just gave the single most important metric. Of

32:35

the company is renewal rate. It

32:37

speaks to franchisee health. It speaks

32:39

to franchisee relations. You. Know

32:41

they sign ten year. Agreements: We

32:44

sign tenure agreements with the franchisees.

32:47

And at the end of the ten years. They.

32:49

Have a choice to extend and we have a choice

32:51

to extend. Ten. Years a long time.

32:54

Last year, we renewed a hundred and

32:56

seventy six of one hundred and seventy

32:58

seven agreements that were available. Ninety.

33:00

Nine Point four percent if you look

33:03

over the past five years, Is

33:05

Ninety nine point two percent Li renewed? Six

33:07

Hundred and Twenty two out of six hundred

33:09

and Twenty seven. We really. Focus. In

33:11

On These numbers. I Know These numbers. Because.

33:13

It's really important to the whole company. And.

33:16

We're really proud of this, but if you look

33:18

at over the past ten years to answer the

33:20

question about variability. Or highest renewal right

33:22

was one hundred percent or lowest was ninety seven

33:24

point four. So. We

33:26

really haven't had situations where en

33:29

masse things weren't working out. We

33:31

try to really identify early. If

33:34

we have a real focus on stores

33:36

that are under a certain dollar threshold

33:38

and try to work with them to

33:40

sell, we have a very active. Emanate

33:42

operation here. Where. We transfer

33:44

stores from existing owners to new

33:46

owners and so we try to

33:49

identify the problems and help people.

33:51

Get. Out gracefully. Before.

33:54

It comes to the under their renewal as bad

33:56

for everybody and bad for the community. Bring.

33:58

It back to an earlier point you. The with

34:00

the manual and one of the things

34:02

that you will see sometimes is people

34:05

will stop buying if there are overloaded

34:07

with inventory or there's too much coming

34:09

in. How. Do you help manage that?

34:12

Because obviously I would imagine that there are

34:14

periods of time where you're just seeing more

34:16

selling than buying. Is. That ever a

34:18

risk is it is something where it always

34:20

ends up balancing out on the other side

34:22

of it. Through. Previous cycles didn't

34:24

feel like we've got a really ugly

34:27

macro cycle in a while, but through

34:29

previous cycles has that ever cause real

34:31

stress on individual business operators is definitely

34:34

cause stress on individual stores. It's never

34:36

been prevalent cross the whole concept of

34:38

that makes sense So hard at it

34:41

is. Are. You set up

34:43

properly, Is your back counter organized

34:45

properly? Or. You staffed properly. There's

34:47

just a lot of organizational things like

34:50

how your set up. It's

34:52

not due to the economy. we

34:54

believe it's more operational. nature is

34:56

more mindset in nature. Are you

34:58

understanding that when you hang up that

35:00

sign and says that we're not buying

35:03

today? How much that negatively impacts the

35:05

consumer experience? I. Do want to

35:07

transition a little bit the how you

35:09

managed the corporate business. We've. Talked

35:12

a lot about the existing model

35:14

today. I know there was a

35:16

fairly large change several years ago

35:18

where you added existing leasing business.

35:21

And. Decided to part ways.

35:24

With. Batter or Wine That down? Can you

35:26

just bring us into that decision making and

35:28

thought process behind something like that may be

35:30

introduced us or what the leasing business was

35:32

and then the decision to ultimately part with

35:34

If. We. Don't do a lot

35:36

of investor relations know analysts covered know call

35:38

so this is not a question I've ever

35:40

talked about publicly before. As a

35:42

really hard decision, but it was a very

35:45

necessary decision that I think is worth delving

35:47

into. so I really appreciate that you want

35:49

to talk about that, but. We've. Discussed

35:51

that our current mission as provide resell for everyone

35:53

and all the work we put into the rebranding

35:55

and the refocusing of the company and I attribute

35:58

a lot of our recent success to those. It

36:00

isn't that focus, but in the past

36:02

if we're having this conversation ten years

36:04

ago, our overall strategy was different. The

36:06

sign behind me would have said. Create.

36:10

Support Finance business. That.

36:12

Was our tagline. And. It was a

36:14

very elegant way to connect to businesses

36:17

that really didn't have anything in common.

36:19

Franchising. And leasing are leasing operations.

36:21

We started a small ticket and a middle

36:24

market equipment leasing operation in two thousand and

36:26

four And the plan at the time at

36:28

me I literally camp Leo's twenty years ago

36:30

can I was here and that app in

36:32

April One, Two thousand and four. It was

36:34

to take the cash flow from the franchising

36:37

business and deployed in a really high returning.

36:39

And Amps product. And we

36:41

started down that path. And. Two

36:43

thousand and eight And two thousand and nine came.

36:46

And not put a really big dent in our small

36:48

ticket business. that was. Smaller. Transactions

36:51

for small businesses. That.

36:53

Piece of the business ended up being a

36:55

real value. the tractor for when Mark. But

36:58

we. Focused we front that down

37:00

after that period of time and had

37:02

a very small. Portfolio. But

37:04

profitable portfolio. And we focus our effort

37:07

on that middle market business where we

37:09

were supplying technology, equipment, or middle market

37:11

companies private equity back companies, venture back

37:13

company, younger public companies, and we as

37:15

a business, we financed over three hundred

37:17

million dollars. We purchased three hundred million

37:19

dollars of equipment on behalf of our

37:21

customers, and keep in mind that when

37:23

we started that business or market cap

37:26

is one hundred and forty million dollars.

37:28

It was very substantial. To us, it was

37:30

over seventy percent of our balance sheet. And

37:33

it was over twenty percent of our earnings per share.

37:36

And. The other piece of it was I

37:38

don't have a time clock or anything,

37:40

but I estimate that. I. Probably spent

37:42

thirty forty percent of my time on these

37:44

businesses. So if you sort a step back

37:47

from all that, he was a key part

37:49

of our strategy. you say, why did we

37:51

make this decision And what really happened was

37:53

twofold. I think the first was

37:55

just handedly. We never were able to grow

37:58

the leasing business fast enough. To

38:00

utilize the cash flow from franchising. We.

38:02

Just never met our goals for customer

38:05

acquisition. Actually, I would say we consistently

38:07

missed our goals for adding new customers,

38:09

but we still ended up with a

38:11

small but very profitable business. If is

38:13

extremely profitable business v go back and

38:15

look at the numbers. But. It

38:17

then it required know capital. So. We

38:19

had to businesses than that required know capital. But.

38:22

The most important thing to me was if you

38:24

look at this. Sustained period of time

38:26

and it doesn't have one month or one

38:28

years has yielded twenty year period of time.

38:31

The. Core Resell business. I think you can just

38:33

hear it in my was. It just vastly

38:35

exceeded all of our expectations and I just

38:37

didn't think it was getting enough attention. And

38:40

if you look back at our history. From.

38:42

Two thousand and. Two to two

38:44

thousand and twenty one. When a lotta

38:46

different corporate development ideas here, we made

38:49

minority investments in private companies, We started

38:51

to leasing businesses at a very pivotal

38:53

time in our history. We. Chose

38:55

to start a franchise consulting business.

38:58

To. Find the next great idea and franchising.

39:00

And. Throughout all this I just kept coming

39:02

back to and the management team kept coming

39:05

back to. The. Poor and it just

39:07

got to the point of just answering

39:09

a very simple question. Where. Should

39:11

we be spending our time. It just

39:13

became crystal clear. So and twenty twenty, we

39:15

sold the small ticket, least portfolio. we shut

39:18

down the franchise consulting business. These moves are

39:20

very necessary during call between to put one

39:22

hundred and ten percent of our effort into

39:24

the. Franchisees. And to

39:27

our employees during cove it and then after that

39:29

the actual business decision was sort of a

39:31

no brainer to run it off. We rebranded the

39:33

company. We. Redefine the mission and we were

39:35

on our way. I can really

39:37

tell you. Since. We've.

39:40

Done This. The. Quality of the

39:43

ideas The desire as the

39:45

ability to invest more in

39:47

the business. Is. A direct

39:49

result of focusing our efforts on

39:51

the resale industry and. The. Problem

39:53

is these decisions are never easy.

39:56

Because. It impacts people. But.

39:58

Now that it's three years in the rearview mirror, I

40:00

truly believe it's probably the most important decision

40:02

we've made in the past ten years. And

40:04

maybe perhaps the past twenty years we've never

40:06

been. More. Aligned with our

40:09

franchisees with our. Employees.

40:11

With our shareholders and I think

40:13

we have absolute clarity. Regarding.

40:16

Who we are and why we are

40:18

here. I. Think our successes

40:20

directly related to that. That's the progression.

40:22

It wasn't a bad idea, just so

40:24

we're clear it and it ended up

40:27

combine been. Very. Profitable for our

40:29

shareholders to be in those businesses. But.

40:32

The core resell businesses. Really?

40:35

Positive self. Yep! Listening

40:37

to the first forty minutes of the conversation

40:39

there was so much strategy and thought and

40:42

focus on that business than to hear that

40:44

there was this. Tangential. Business

40:46

which is related but very separate. It

40:49

makes sense and ties into the answer.

40:51

I think pretty thoughtfully in the dynamics

40:53

of how we could grow and are

40:55

your redeploying cash? And. How that evolved over

40:57

time. I want to put on that a little bit. Just.

41:00

In terms of how you treat that

41:02

application now with the castle that comes

41:04

off of it franchising business, how do

41:07

you approach that to strategically as a

41:09

manager. I. Mean, that's a question

41:11

we get a lot you can imagine. Our

41:13

first tenant of capital allocation is run

41:16

a good company. Because if you don't

41:18

run a good company, there's no capital

41:20

to allocate. Pretty simple stuff and we

41:22

do. Run. A profitable company.

41:24

So despite the significant investments we

41:27

make and marketing and. Technology.

41:29

We do have access capital every year

41:31

and the philosophy is we don't want

41:33

to retain. Excess cash and our balance

41:35

sheet. And what we first do as

41:37

we looked define high returning activities for investment

41:40

that are. Consistent. With our core

41:42

resell operations and historically there been very limited

41:44

opportunities to do so, we look at a

41:46

lot of things. We move forward with very

41:48

few. So. Acquisitions A

41:50

risky. Some. Of the minority investments

41:53

are out there. Is just not things

41:55

that we done so far to me we're never going

41:57

to do I'm so we always look for higher return

41:59

risk adjusted. Activities. But. As

42:01

a result, the primary use the funds has been.

42:04

That. Pay down. Share. Repurchase

42:06

in special dividends right

42:08

now. We. Have longer maturity

42:10

debt at very low rates so debt

42:12

pay down isn't a great option. We

42:15

have. You. Very attractive financing and

42:17

place that doesn't mature for many, many years,

42:19

so it just doesn't make sense for us

42:21

to do that. The next progression goes to

42:24

share repurchases. We. Stayed very

42:26

disciplined. impatient With respect to share

42:28

repurchase we only want buy our

42:30

stock. In. The Open Market. If

42:33

it's at evaluation that we deem to be

42:35

proper, we've done a lot of this. We've

42:37

repurchase. Four. Point: Three million shares

42:39

in the last. Twenty. Years For

42:41

about three hundred fifty million dollars we have.

42:44

Under. Three point Five million shares today. So.

42:46

It's. A fairly active. Program.

42:50

We. Don't Do it by a formula. You.

42:52

See a lot of companies out there that are

42:54

going to buy every quarter or by offset dilution.

42:56

We don't think that has the potential to lead

42:58

to good outcomes. Frankly, Twenty Twenty

43:00

Three was the first time in twenty years that

43:02

we didn't repurchase shares. But. We

43:05

do pay a quarterly dividend, which we think

43:07

is set so meaningful level for shareholders that

43:09

they get a little. Payment. Every

43:11

quarter, but it's not big enough that it

43:13

hurts. Flexibility: With some of these other ideas

43:15

of i want flexibility. To. Buy back

43:17

soccer to produce mother ideas that are valued ready

43:19

for all of us. But when.

43:22

All those things don't happen in

43:24

any given year. Were very comfortable,

43:26

very receptive. pain out special dividends

43:28

and. I've said this before,

43:30

but shareholders really enjoy the hots up

43:32

in. Nothing. Makes your day! Get

43:35

and seen a press release that the company fan

43:37

of Special dividend. We paid out special dividends in

43:39

each of the last four years. Total.

43:41

And a little under twenty three dollars share.

43:43

So we just think it's a very straightforward

43:45

policy and we get a lot of positive

43:47

feedback from. Shareholders. On how

43:49

we manage the capital structure an alley

43:52

manage the. Capital. Allocation. Yeah.

43:54

We like to refer to that

43:56

type of share buyback history at

43:59

Vassar Cannibalization. You're eating your check

44:01

out. In Twenty Twenty Three, that

44:03

decision making process of know buybacks or

44:05

the special dividend I assume that was

44:07

what you referenced before, just on valuation?

44:09

Yes And then that natural question always

44:12

with the vivid and policies and that

44:14

tax impact about those. How do you

44:16

balance that when it comes to the

44:18

tax effectiveness of thinking about the buyback

44:20

relative the David and and. Your.

44:23

Approach to having been in the Cfl position as

44:25

well to thinking about that. I. Don't

44:27

get too hung up. our Cfl Tony doesn't get

44:30

too hung up on paying taxes. If.

44:32

The choices buy stock that we think

44:34

is not. Appropriately valued.

44:37

Keep cash on the balance sheet or give it

44:39

back to the owners of the company. Tax.

44:42

It doesn't factor into that. Decision.

44:44

It's just. Organ give

44:46

you your money back. it's yours.

44:48

So we obviously. Hope.

44:51

That there's opportunity to buy stock in the

44:53

future because that's better for all of us

44:55

if we continue to do that. But.

44:57

I think it would be very foolish

44:59

to consistently by at levels that you

45:01

don't think create value. At

45:04

the end of the day. I'm. Responsible for

45:06

running operations of the company. Along.

45:09

With run a guy that are Ceo. And.

45:11

Tony. And I are responsible for allocating the

45:13

capital and. I just don't see a.

45:16

Path. Forward where we're overpaying for seven

45:18

hours in the right. But.

45:20

We may not. decisions over the years that

45:23

uncomfortable being wrong sometimes. And as

45:25

in a criticism is you should have bought more. I'm.

45:27

Okay with that, Understandable.

45:30

One. Of the last written by had you referenced

45:32

before. The investor relations side

45:34

of things I've been given unique approach.

45:37

Where. You don't do much

45:39

in terms of conference calls or

45:41

communications in. I've worked with other

45:44

businesses that have operated similarly extra

45:46

writers of Washington out on the

45:48

west coast or famous example. At

45:50

a chart. That looks similar to yours

45:53

half. Performance doesn't indicate anything about

45:55

future results, but just the philosophy

45:57

behind that and the focus on

45:59

our. Asians and not being as boko

46:01

on calls events and what not hitting

46:03

just talk a little bit about what

46:05

goes into that. We're. Very

46:08

unique company. One of

46:10

the characteristics from a shareholder perspective, investor

46:12

relations perspective. I think we're unique because

46:14

twenty shareholders on seventy four percent of

46:16

the company. So it doesn't. Take.

46:19

Us a lot. To really understand.

46:22

We. Wouldn't have to spend forty million dollars like.

46:24

Disney did are held said to try to.

46:27

Organize. That we would call up. To.

46:30

The top twenty work for the company, so we

46:32

pick up the phone and call eighteen. Maybe there's

46:34

three or four index funds that wouldn't return the

46:36

call, but we get to everybody else so I

46:38

think that makes it the decision to do with

46:40

the way we do it. Affective.

46:43

I just really believe that. If

46:45

you are a shareholder, where do you want

46:47

me spending my time. Do.

46:50

You want me? On. A conference call

46:52

with analysts are trying to hit our

46:54

stock or at an analyst day or

46:56

do you want me worried about find

46:58

in the next market? Be.

47:00

In what the franchisee and helping them out.

47:03

And I've never met a shareholder that doesn't

47:06

want be spending my time on the core

47:08

operations. We. Talk a lot about capital

47:10

allocation and these formats because people are interested

47:12

in it. It doesn't take up any time

47:14

in my day. We. Have the

47:16

policy in place. We move forward

47:19

so I think for us. Were.

47:21

Easy to get a hold of. Someone.

47:24

Wants to cause a shareholder of respective shareholder.

47:26

They call Tony they call me we talk

47:28

to him. So. It's

47:30

just worked for us that way. And.

47:33

I. Just like keeping it simple, I've

47:35

learned from someone who was really talented

47:38

at this. I listen very carefully

47:40

in terms of how he did it. That.

47:42

Works and I'm not gonna change it. There's just

47:44

no reason to change it because it's not like

47:46

we suffered from a low valuation. A think we

47:48

can have a different argument if that were the

47:50

case. But. Not broke. Don't fix

47:52

it right? I think that's a fair

47:55

take away and the focus on the

47:57

business and a focus on what that

47:59

core business. Is there have been apparent

48:01

throughout the conversation. We typically close with lessons

48:03

from a business and usually it's an investor

48:05

looking at a business in those lessons that

48:08

they could apply elsewhere, but I thought we

48:10

could just take it even higher level. The.

48:12

Lessons that you've taken away from your career. Long.

48:15

Time spent at When Mark. That

48:17

you would share at the end of this conversation.

48:20

I fly have a couple of. I. Think the

48:22

first lesson that I would probably say is

48:24

the most recent loss and then we've touched

48:26

on a little bit. But it's really it's

48:29

all about the mission. I. Can't

48:31

overestimate how important these past three years

48:33

have been to when Mark to me

48:35

personally. And I just think the

48:37

standard. For. Any company. For.

48:39

What! Any one in my position

48:41

is looking for and ultimately responsible

48:43

for his sustained excellence. I.

48:45

Believe that having clarity of purpose as

48:47

an organization allows for this. It. Took

48:50

a very long time in my career to

48:52

be responsible for. A. Company like

48:54

this. To. Define the mission of a

48:56

company like this and I hope the work

48:58

we've done over the past few years will

49:00

contribute to the sustain excellence for our franchisees

49:02

and employees and the whole network. But.

49:04

When you add a pure mission mad it. Really?

49:07

Inspires people, They provide

49:09

clarity. You get to amplify your message to

49:11

a much broader audience, and you can without

49:13

it. And everyone knows what

49:15

their role is. And. It's super

49:17

powerful. That's probably. The. Most

49:20

important mission. But. I think

49:22

the other one. I would say it's

49:24

more on the personal side, but I

49:26

think professionally. I just think it's really

49:28

important to express gratitude. And. Your

49:30

personal life in your professional life. right?

49:33

Hand written thank you Notes: It. May

49:35

sound a little cliche, but you know

49:37

if you take the time to regularly

49:39

reflect on how did I get here?

49:42

And. To express gratitude and thanks from the people

49:44

in your life that have helped you. I

49:46

think it's uncommon is sad. Had a little

49:48

bit that it's uncommon but. My. Parents

49:50

taught me the value of this very simple task

49:52

on I was a child and. I. Believe

49:54

that writing some a handwritten note it

49:57

can contribute to that relationship and accelerate

49:59

the formation. That relationship is. you're letting

50:01

that person know that what they did

50:03

for you. Is mean

50:05

for and you're letting that person know that

50:08

they're worth the time. It took

50:10

for you to write that letter and I meet a

50:12

lot of people in my. Professional.

50:14

Life that. They. Seem to think they

50:16

did it on their own. And I think

50:19

that's a big mistake of I truly don't

50:21

think I've ever met anyone that's done and

50:23

on their own and it's not terribly inspiring

50:25

behavior, so I just feel. Very.

50:27

Fortunate for all the people that helped me in my

50:30

life and I think that would be a big lesson

50:32

that I would share with people as well. Think.

50:34

It's excellent weapons and I will

50:36

say that I completely agree with

50:38

you on that and written no

50:40

point. I. Think that is something

50:43

that goes a very long way. I've

50:45

been an excellent. Overview.

50:47

Of your business, the resale market, everything

50:50

going on there. I think there's a

50:52

lot that the audience will take away

50:54

and. Hearing. It within probably also

50:56

viewing their communities a little bit differently so

50:58

I appreciate a brat. Thank you for sharing

51:01

all of the knowledge here. Thanks matter! Really

51:03

appreciate your time. To sign

51:05

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sign up for our weekly thundering

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