Episode 2: Ben Gergis and Dominic Hesano- Co-Founders and Owners of DryMedic Restoration Services

Dominic discusses how well-insulated disaster restoration is from so many other industries.  We discuss "people over profits" and their "franchisee first" approach.

Ben discusses synergies between Authority Brands' portfolio, specifically Ben Franklin Plumbing, whose services intertwine with DryMedic consistently.  There is also an alignment in core values between DryMedic and parent Authority Brands.

Franchise owners start with emergency services, achieve revenue targets, then expand into other service lines such as personal property and reconstruction.

Dominic describes DryMedic as "a marketing company that happens to do restoration".  

DryMedic helps franchise owners develop 25 key referral sources to launch their business.

We discuss residential vs. commercial jobs.  DryMedic owns three 50-foot semis in Bloomfield, MI. If a franchise owner gets a call for a large commercial loss, such as a hotel, DryMedic will assist.

Ben discusses their brand-new state-of-the-art training facility which trains new owners on their CRM system, estimating software and gaining real-world field experience.

Ben discusses how he views the partnership between Franchisor and Franchisee.  If the Franchisee is successful, they are successful.  It's a reciprocal relationship.

Dominic shares that the flagship DryMedic corporate location did $13.8M in revenue in 2022 with  26.2% EBITDA (after imputed royalties) on $4.856M in mitigation revenue.

Ben asks potential franchise owners three questions: Do they want it?  Do they get it?  Do they have the capacity to do it?

DryMedic loves working with military veterans and offers veterans a 30% discount on their first territory.

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Mike Halpern, CAFC
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Transcript

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This is the Franchise QB Podcast, where we empower entrepreneurs to win big in franchising. We huddle up weekly to educate our audience about the most successful small business model ever created – franchising. Welcome to the Franchise QB podcast. I'm your host, Mike Halpern, a 20 year industry veteran and entrepreneur. My mission is for listeners to achieve their American dreams of creating wealth and independence through franchise ownership. Every week we speak with franchisees, franchisors, or vendors that support the industry. Thank you for joining us and let's get started. Welcome to the Franchise QB Podcast. I'm your host, Mike Halpern, a 20 year franchise industry veteran and entrepreneur. Today we have two very exciting guests joining us in the huddle, Dominic Hasano and Ben Jurgis, owners and co-founders of Dry Medic Restoration Services. Welcome Dom and Ben. Thanks Mike. Glad to be here. Thank you, Mike. Thank you for taking the time with us today. Absolutely. So Dry Medic was formed back in 2014 in Bloomfield, Michigan, Southeast Michigan. Fast forward nine years, and you guys partnered with Authority Brands to scale the model through franchising. Let's start back at the beginning. Take us back to 2014 and why you guys decided to enter the restoration space. Great, yeah. So back in 2014 and 2013, really, the story starts back then, even further before we started. We really had this idea and concept come up to us through the other co-founder, Carlo Sissano, who's our brand president now. He actually came up with this idea and said, hey, what about the restoration space? And courted us to help into that vision. And really, we decided that we were looking to become somebody that could be there to help others get through a really rough time. And at the same time, use all of our expertise, knowledge, and things that we've amassed over the years in business. both working in retail markets and in service industry markets, and bring that all to the table to help really create a powerful brand in our area to help people recover from a disaster. Yeah, I would piggyback off of what Ben said, and one of the things, you know, there's multiple, but some of the main things we love about the disaster restoration industry is how well insulated it is compared to so many other industries. Talk about recessions, economies, inflation. Amazon Artificial Intelligence so many factors that we could get into We're so well insulated from these things compared to other businesses that you know We put people over profits and what we do and you know We combine that with a franchising experience that Ben has Myself and Carlos from other brands as area developers and as franchisees first we have this franchisee first model here and you know, it's proven to be really powerful as we've teamed up with Authority Brands. Yeah, that's a really good segue because you created this amazing flagship that's time tested in Southeast Michigan. And then you partner up with Authority Brands, who has a powerhouse in the home services space, 15 systems under one roof. Why did you guys choose Authority Brands as your partner in franchising? That's a great point. Why we chose them is because of their, who they are as a company and as a brand. Their philosophy aligns with ours and that's we're there to help people and putting people over profit, right? So they were very, very good at connecting us with another great group of service industries such as plumbing with the Ben Franklin's, which is part of the one hour Mr. Sparky, the one hour heating, cooling, Mr. Sparky electric. Those had a lot of synergy in what we do. Those are services that we intertwine with constantly and consistently. So when we were approached by them as part of the courtship, they really understood the systems and process that we've had developed. And they didn't want to reinvent those systems and process. And they said, guys, we want to take this nationwide. And what we really want to do is because we have the incubator of the retail space to provide all of the backup and factual data behind it. Then they said, we're going to go one step further. And we're going to open up. multiple locations within what they call retail, which is the corporate owned locations that are also incubators that we can make sure that these systems in process can be duplicated and they can be replicated in those other markets before going in and saying, hey, this works for you. Don't worry about it. This is no issue. It's all tested. It's all confirmed. It's all been really, really well oiled before it's presented out to the network. which was really exciting for me as an operations person. Right? That's really great to have access to all that data. And then you go into a market and you already have a head start because of the other kind of partner brains. That's really interesting. I would just add one other point there. The core values that we have as a company that we still have aligned with the core values that authority brands have as a company. And those combined core values have proven to be really, really powerful. Makes sense. Very, very cool. So let's talk a little bit about a new owner comes in. They're providing restoration services. A lot of those companies only offer emergency services. What type of services can a Dry Medic franchise owner offer? So we are a full service restoration franchise. And our retail location here in southeast Michigan in the Bloomfield Market, as you referenced, is a full service restoration business. The path to success for franchisees starts on the emergency side. business. There are a lot of components in learning and understanding what we do. Compared to a lot of other franchisors, we offer everything under one license, right? But we start out doing emergency services and then when they reach certain revenue targets and or time we would allow them to transition into the other services such as personal property and then reconstruction sites. Specifically under the emergency services, we do water, fire, smoke, mold, So a lot of those things are very synergetic. So the processes, the procedures, the protocols, all line up. And everything starts with the emergency portion of your business. So we really have to have a franchisee build the foundation and that foundation will then provide other opportunities to scale and other opportunities to grow through different departments. We still, in the meantime, teach them how to monetize those opportunities through referrals and... Other things that you know you capture on that marketing cost even if you're only offering them a portion of the service you can provide contractor friendly You know connections to them so that you can still make money on the back end. I got you So it's kind of walk before you run. Let's get the core services figured out Make sure that you kind of understand how it works before we start adding these other service lines to get more complex. And that makes sense. I'd like to add one more part to that. Really, the other part of having that focus on the mitigation side of the business is it allows you to build up staffing that don't require necessarily high intensity training, where you need certain licensing criteria or certain certifications that are hard to obtain, or even the skill set, if you imagine a painter, right? There's a million ways to paint a building, but there's one right way to do it. Right? So teaching somebody to have that artistic touch in the mitigation side is a lot easier than let's say on the reconstruction side, which would require all these moving parts that you'd need to understand and really have the artistic touch to achieve it. Okay. Very interesting. So let's talk a little bit about client acquisition. Dom, I've heard you describe TriMedic as a marketing company that happens to do restoration. What do you mean by that? And do you approach that as kind of a key differentiator for the brand? absolutely phenomenal question Mike and thank you for asking it. It is absolutely a key differentiator for us. So Carlos Hasano who is my older brother and the brand president of DryMedic is a marketing genius and his marketing genius has been passed on through the company and through the franchise offering. So I say that we're a marketing company that does restoration because in the business that we're in we're heavily dependent on people and heavily dependent on pipeline. And in year one, we want to help a franchisee develop 25 key referral sources to help launch their business. Ultimately, they're going to be in the 75 to 125 range as they're established and organized and going on down the line. But what we've learned from previous business experience that we have is the importance of marketing and continued marketing, especially in the emergency service restoration business. You're only as good as your last job. and you're only as good as the pipelines that you build. And when I say 25 key referral sources, one of those key referral sources is SEL. One of those key referral sources is PPC. One of them is lead generation. One of them is through a plumbing partner that we have, through the BFP network, or how we'll teach you to go approach a different plumber. Each job creates a plethora of opportunities to build pipelines. And the system that Ben designed, that is basically our CRM tool that manages the workflows and the jobs and builds the packages for us to build insurance companies and he is the architect behind that. There is a marketing section that's built within this within each job because each job offers a ability to reach out to an insurance agent, the insurance adjuster, potential property managers, plumbers that may have been on the job site, HVAC technicians. So when I say that we're a marketing company that does restoration. We truly are because even though we've been established for nine years and we have a huge pipeline of business We still market every single month and we have A lot of data over the years that will help our franchisees throughout the country Very cool. Yeah I mean keeping that pipeline robust with different lead sources is key because you don't want all your eggs in one basket when it comes To sourcing these great jobs So let's talk about the, I mean, clearly residential is probably the focus. Do you also offer commercial services for franchisees? And what does that come down the line as they become more mature and have the staff to take on those bigger jobs? So we like to think that let's crawl before we walk and then let's really get our walking down before we start running. Depending on the franchisee that enters into the system and their understanding and knowledge of what it is that they're doing and their ability to exhibit what the services that they're providing on a high level is, I always recommend we start with residential. And from that, we move into the commercial setting. It's a lot easier when you think about numbers. There's a lot more homes than there are businesses that are owned by individuals that are running and operating. And those frequency of issues are a lot larger when you're dealing with a home versus a commercial setting. So we love our franchisees to focus on the residential side. but never lose sight of the opportunity for the commercial. The commercial side will make up a nice bulk of income on one job where it may take 10 or 15 smaller residential jobs to make that up, but the frequency in which those come is not conducive of a franchisee to stay active in motion all day long if you're solely focused on those commercial type of projects. Yeah, so let's focus on the singles and doubles and when the home runs come along, we'll take them, but let's kind of see what... Continually has that repeatable revenue and let's focus there I mean, it's not a go for those home runs as well because they are phenomenal jobs I think the other important thing to notice the support that we offer. Yep. Um Nationally, we have three 50-foot semis here at our Bloomfield, Michigan location So if a franchisee was in the situation where they just opened up and they got a call for a large commercial loss Such as a hotel or a municipality building. Guess what? We're gonna do we're gonna figure it out They're not going to turn that job down. We have the support locally through temp labor, through our own labor and through the three 50 foot semis that we have as a national disaster response team to assist the franchisee. That's great. That's good to know that for an owner. So let's talk a little bit about your franchising team that supports the owners. I know Dom, your role as franchise development manager, I'm sure you wear more hats, but you help guide a candidate through the process, make sure they're a fit for the system. Ben you are the VP of integration. What does that mean and how do you interface with the franchise on or as they come on board? And join dry medic. So I've actually we're two titles now. I'm also the VP of Operations as well. So integration operations what that really looks like for us as an integration side is we bring in what Dominic has Created a franchisee opportunity who signed up for service They come over into my office and I integrate them into our system and then we train them We just built a state-of-the-art training facility that has amazing, amazing tools inside of it, where we're able to fully train on the CRM system, fully train on the estimating software that's utilized, and then give them real-world experience, getting them out in the field, touching, feeling, smelling jobs, for lack of a better word, and understanding what it's like to be a technician first, so that they can have the opportunity to go back and train their team. What's really nice about what I'm able to do now... is during franchisees training, there's a lot of information. You can't expect the franchisee to just leave this and feel like, oh, I've got everything I need. Well, now they've got that virtual training center that they can come to and log into any time they want during the hosted trainings. So that training center is occupied and in use five days a week. So we host multiple trainings for ongoing education. We do role-based trainings. So for an example, at the most basic level, you'll have a water technician. And they might be onboarding in a location in Florida. Another guy might be onboarding in California or Gal. And we can now bring them into virtual training to get them a role-based training from the franchise perspective to give that franchisee an opportunity to take that basic core knowledge and then train them further down the line in the field. We've got tools for that. And my role, Specifically is to help those franchisees get started On-boarded get them trained open up their doors and then they stay with my team from that point forward for ongoing support I think something that's important to mention as well Like we have Chelsea as an example that is in franchisee on board and Chelsea wasn't just like a random hire for us We really believe to promote from within before we go out search for different talent Such as industry talent that might be there. So Chelsea ran our front office for two years as a coordinator She understands the jobs inside and out she understands what the team has to deal with and Chelsea now is on franchising support So she along with Ben Through the integration process will have weekly if not multiple calls per week with a franchisee in the onboarding phase Through a 250 point checklist backed by authority brands and proven processes and procedures of what we need to do to get those people open. So the franchisees are gonna have a huge responsibility in that themselves to get the work done, but we're gonna be on top of it. The other thing I think that is important to note from a support perspective is the team that he's talking about to do the continued and ongoing training is we have franchise business consultants and marketing consultants for every single franchisee in the network, not just at DriveMedic, through the Authority Brands Network. And we give them continued and ongoing support. They have a problem on a job site. If they need to pick something up, they have somebody that they can call 15 times a day if they need to. And that got me up to do a great little story. The other day we had a brand new franchisee in California. He signed a beautiful fire loss and he's brand new. So fire is one of those rarities that really don't come up every day like the water does. It kind of happened more like a monthly or bi-monthly frequency. So he was really stressed. He was really like, I don't know what to do. I'm having some reservations about it. I said, listen, sign the job up. We're gonna help support you every step of the way. We use some of the technology. That was really helpful. So an example of that was he loaded up all the information in our CRM. I was able to get into it with his permission and he let me in and sent me a link to that CRM tool. I can then see all of the pictures he took. He sent me a video. I was able to do that. and then help them guide them through the process of what you need to do. That was all on a Saturday at 10 o'clock my time, 10 PM Eastern time. So that was like 7 PM in California. And we're all in to help these franchisees be successful, because if they're successful, we're successful. It's a partnership. We approach it like these offices are ours and there and we are their office. So it's a complete reciprocal. relationship that we give and take all day long to help each other. And it was, it was a proud moment for me because he's brand new. He just left the training seminar and he's calling, asking great questions. And it proved that he really don't understand what he got out of training. And he just wanted that. He just wanted that to support, like just somebody there to help him know that he's doing it right. The validation that he was doing it right. And I was so proud of him because now guess what? It's Monday and he started the job and he's working on it and he signed them up for service and he's off to the races with. That's really exciting. It's so nice to know that they have this lifeline when they have any challenges, concerns. They can get a real pro in their corner to kind of help them with a new problem and find a solution for it. So it's great that you're able to help them out with that. So let's get into the economics a bit. So to start one of these, item seven says 133 to 317. That is going to include the vehicle, leasing, a lot of the equipment. Just give us an idea of what you get for that initial investment for a new owner to start. I know I'm assuming that out of the gate, there's not a brick and mortar component and you kind of grow into that as you kind of build your revenue. So what does it look like for a new owner in that 130 to 370 range? What's the start of cost? Great question, Mike. And that's based on one territory. which is based on a population size of 250,000 people. And the biggest differentiator there is the equipment package, which is why the high end is so high compared to the low. We're seeing most people get in the 150 to 175 range for a territory. The reason in the item seven, there's three different equipment packages, one that was a baseline of 65, then 95, and then 165. Unless they were an existing contract or it's a conversion program. Nobody's taking the 165 package because we don't need to get in the technical details of what's included in that But as an entry-level franchisee that's starting out you don't need that So it's important to note that they'll get in for 150 to 175 range generally speaking now We don't require you to start out with a brick and mortar location But at some point you will get into a light industrial flex space But we do allow franchisees to start out of their home or storage facilities now We don't necessarily want that from the get-go because we want the people that have the if you build it they will come attitude, right, and we're so confident in the industry and in our training, but not every situation allows for that. There's still markets like somebody just joined in Franklin, Tennessee and for him to find industrial flex space in that area is very, very challenging. So we're starting out of a storage facility for this specific franchisee because we're in the process of helping him identify where there is to lease space that makes the most sense for him within his territory. So it's definitely not a brick and mortar business, but it is a business that allows you to operate in a bunch of different areas. Got it. Very cool. So let's talk about the economics. I know your flagship store has been around for a while. Can you share with us how it has performed and what you can share in terms of franchisee performance system-wide? Yeah. So great question. As you're aware, I'm only allowed to talk about what's in our item 19 and specifically to the Bloomfield location, you know, that was reported last year. We did 13.8 total million dollars. I'm sorry. 13.8 million dollars total business for the franchisees perspective. What's important to note is broken down by service line mitigation. personal property and reconstruction. So let's focus on the mitigation portion because that's what franchisees are going to think about. You know, we achieved a 26.2% net dividend or $.856 million in business after imputed royalty, which is very, very strong for any business in general and specifically for the disaster restoration industry. And you know, there's a lot of margin within the business and we're in the insurance billing business for a reason. Right. And, you know, as next year's franchise disclosure document will come out, we'll be able to talk more about what the franchisees were able to accomplish within the dry medic system. But that data is just not there today. Yeah, it makes sense. But that's really cool to see the flagship, you know, 26.2% after imputed royalty is super impressive. And that's going to get a lot of candidates real fired up about the opportunity if it's done right. So that's where we do the training, the real training. So that $13.8 million in business. It's going to be different next year and higher. We can't disclose what that is yet, but it will be higher. And what I think a key thing for people to understand is, those are the jobs we take people on. One of the other differentiators we have is how we do our training. It is real. We take you to real job sites, to the real problems with real customers, so you understand the interaction and how to sign. We don't just leave you in our state-of-the-art facility next door. There's real training that happens. Yeah, that's got to be really valuable for owners. So let's talk about scalability. Dom, I've heard you talk about TriMetic has kind of a start small, grow big model and you referenced how you can kind of grow into your industrial flex space as you kind of expand the business. So you started with one truck and two techs way back in 2014. And in Jared. Like the ice cream, literally. And now you have 85 team members and 55 trucks a decade later. So if a new owner starts with a ban and two techs, how quickly can they expand their business? It's really up to them. You know Mike, this is one of those businesses where thankfully you're not reliant on you know people walking in your door and trying to drive traffic to your business. You can go out and market your business. You can go out and establish relationships. You can get the phone on top of what the franchise does with its own internal marketing and its marketing strategies. So you know, Don mentioned things like utilizing the internet, things like utilizing the authority brands network that we already have built in. Those are all the needs that start to generate from day one that we work to get you in to get clients driven to you. But we teach you the RMS marketing system, right? This is our own system that we've created that helps get clients getting you to clients doors with your truck. putting the extractor down into the water to get some real jobs and get things going. And that system really helps where we like to look at every job as not one and done and move on. That job goes from a client to a customer back to a client for life. And that client is going to be a salesperson for you forever. And the intent of what we do is to make sure that person tells 10 people about you. And we teach our franchisees how to extract data from those clients. and that our current customers to go out and obtain opportunities time and time again. So we have really good training on that. It's probably, I would say, every single day during that two week training that you're learning tactics and executing and they actually show how to do it while we're in the training and when they're out in the field on how we ask for jobs and how we do more. So it's really driven by your ability to want to get more work. And I like to say it all the time. Dominic knows this more than all of us. When we're talking to potential franchisees, there's three main questions that I'm looking for and we need to know the answers to it. Do they want it? Do they get it? And do they have the capacity to do what we're talking about? And if they have those three things, my job is easy. I can train everything else. But if they don't have those three, very difficult to make that happen. And we do a really good job about awarding those types of franchisees the position to have those territories. the scalability portion of your question. In the beginning, as we mentioned, on the emergency service category, there's multiple revenue streams within the emergency service. Water, fire, smoke, mold. Those are your main emergencies that you're gonna see. Then we can parlay those into asbestos, crime scene, and biohazard. So within the emergency category, there is a ton of opportunity to scale. Above and beyond that under the same license we can get you on the personal property side of the business which we have There's so much synergy with the emergency side of the business and then ultimately in the reconstruction side of the business So the opportunity to start small and grow big is huge and as he said it is based on the owner. We don't require Every franchise owner to offer personal property services or reconstruction services. We want them all to be full service at some point but we don't require it. The emergency services are required, doing water, fire, and mold, that's the bread and butter. And we will work with them every step along the way so that they understand when it is time to transition into doing other services, once they have certain infrastructure built. Got it. So let's talk a little bit about your growth to date. Obviously the kind of partnership with Authority Brands took place last year. This year was, Kind of start the kind of acquiring new franchise owners and scaling the business. What's that look like now in terms of how many? Territories have been secured for dry medic as an emerging franchise system Yeah under the dry medic flagship. There's 15 nationwide locations and we're about to add two more this week once You know those franchise agreements are executed and there's about 27 territories across those 15 One recent person that you brought to the team because of such a fabulous job that you do Mike so kudos to you for you know Being such an amazing franchise consultant broker in the industry Really do a fantastic job in that um, and you know you brought the most recent gentleman and who's going to be a rock star and so we're in about 27 territories 15 different locations spread across the east coast and the west coast and we anticipate a lot more growth for Q4 and a ton of growth that's going to happen in 2024. The disaster restoration industry is hot. We have a lot of major markets open right now. They're not going to be there long. You know, when you go look at the other franchisers out there, and I don't ever like to compare, you know, against other franchisers because we know what we do. We know what we do well and it speaks for itself. But there's a reason the mature brands don't have any white space. Makes sense. And to your point, first of all, thanks for the compliment. Working with you is a real treat. My candidate was really thrilled about the process and very quickly made a decision once he saw what was happening up there in Bloomfield. And he's also a military veteran. I know you guys offer a pretty robust discount. Can you talk about that for veterans? Cause it seems like you really like the way they can follow a system and are accountable and responsible. And. Sounds like my candidate was a perfect fit for your culture. So let's talk about the veteran discount you off. Absolutely It's a 30% discount on the first territory And it's a pretty aggressive discount and we absolutely love the military veterans that are on the system. I think Six out of the last nine that Onboarded were military veterans and they know how to follow a system They know how to follow process and procedure and that's what he's architected here not only from the way our vans are designed, but how he's designed the workflows and the job coordination within the system. But I think you hit on the key word there because it sums everything else up, it's accountability. It's something that him and I are huge into, the whole staff is huge into over here. Accountability incorporates so many other things. And not only do we love our military veterans for what they've done for our country, but we love them in the system because... they follow the process. As you know, being a franchise guy for 20 plus years, being in the correct franchise system is a huge advantage to the franchisee. But just as equal to that, you have to follow the process, right? I spoke with a franchisee with a different brand recently within one of our sister brands, right? And Mr. Sparky Electric, I will leave them nameless. He's about to join the Dry Medic team. in the South Florida area and we were having a conversation about Him starting out in mr Sparky electric and thinking that he knew more than he did and didn't follow the system and what he told me specifically Was once I started following the system I doubled my revenue and I doubled my output and things got different, right? So as you being a franchise guy and me being a franchisee in so many systems and doing so much training and development my franchise career ask for help. The processes and procedures are there for a reason. Yeah, it makes sense. That's a really good example. Well, hey guys, any parting thoughts, anything that you want to mention that we didn't cover today about Dry Medic? I can hit on one. When you're out looking for a franchise, whether it's a Dry Medic or anything else out there in the country, if you're passionate about helping people, if you're passionate about helping elevate people's careers, if you're a leader that enjoys, thoroughly enjoys, training and execution. Dr. Medics is a great place to be. We have a lot of fun at work. We spend a lot of days at work, so we try to make it as good as we can. And at the end of the day, we're just people helping people. So if you get gratification from being a hero to others, and a little self-sacrifice to help other people get through it, and then get the rewards of that later on, it's a great place to be. So we'd love to learn about you, and love to have you come and check us out. Well, if you would like to connect with Dom and Ben to learn more about the process to own your own dry medic franchise territory, contact me at franchise QB dot com or on Twitter at QB franchise QB and I'll get you connected with Dom and his team. Thank you, Dom and Ben so much for taking the time to get in the huddle and speak with us about dry medic restoration services. Appreciate it, guys. Thank you, Mike. Thank you for listening to the Franchise QB podcast, where you're at the helm of your future as a franchise owner. If you enjoyed the content, please rate the show and recommend it to anyone that might be interested in franchising. Make sure to visit franchiseqb.com to subscribe to my newsletter and for an actionable playbook to go from walk-on to legend in your new business. Follow us on Twitter at QBFranchiseQB and join us every week for a new episode. See you next time. Visit franchiseqb.com. take the next step of your journey towards wealth, independence, and franchise ownership. And remember, when working for the man gets old, you must do something bold. Thank you for listening.