Franchise QB

Episode 84: Leigh Feldman- CEO, Youth Franchise Brands

• Mike Halpern • Season 1 • Episode 84

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In this episode of the Franchise QB Podcast, host Mike Halpern speaks with Leigh Feldman, CEO of Youth Franchise Brands, about his extensive experience in franchising and the unique business models of his brands, Young Chefs Academy and Flour Power Cooking Studios. 

They discuss the importance of creating a positive customer experience, the revenue generation strategies within the franchise model, and the support provided to franchise owners. 

Takeaways

Leigh Feldman has 17 years of experience in franchising.
Youth Franchise Brands focuses on cooking education for children.
Memberships provide predictable revenue for franchise owners.
Staffing can be owner-operated or executive model-based.
Training and support are crucial for franchise success.
Technology enhances the customer experience in franchises.
Ideal franchise owners are engaging and people-oriented.
Investment in Youth Franchise Brands is under $400,000.
Franchise owners can achieve significant earnings potential.

Chapters

00:00 Introduction
01:04 Leigh Feldman's Journey to Franchising
02:51 Understanding Youth Franchise Brands
05:35 Revenue Generation in Franchise Models
08:23 Staffing and Operational Dynamics
11:38 Training and Support for Franchise Owners
14:24 Technology and Curriculum Management
17:13 Ideal Franchise Owner Profile
20:27 Financial Overview and Investment Insights
23:04 Conclusion

https://franchise.youngchefsacademy.com/
https://www.flourpowerfranchise.com/

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Contact me and my team with any questions along the way. www.calendly.com/franchiseguy
Mike Halpern, CAFC
mike@franchiseqb.com

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. Joining us in the huddle today is Leigh Feldman, CEO of Youth Franchise Brands. Welcome to the show, Leigh. Thank you so much for having me. It is great to have you. So you've spent many years in the entertainment industry, various roles, promotions, DJ, PR, account management, I'm running out of breath. The list goes on and on. CMO, brand president and CEO. Super interesting background, as well as a background in education. So tell us a bit about your journey. in the entertainment and education space and how that eventually led you to franchising. Yeah, absolutely. I first want to address two elephants in the room. Number one, my camera. You look great. I look extra bald with this camera. So for anyone watching this interview, yes, I understand and I apologize that you have to see me. Hopefully you listen to the podcast on audio and just hear me both having to see this face and this hair. That's good news. We have the video side and we have the audio side so the audience can kind of pick their poison. We're good. And the second is, my bloodline is survive. Generations upon generations, war, famine, all these things. I am currently being taken out by pollen. So if I cough or sneeze, my apologies. I just wanted to say that uh as an answer to your first question before I jump into it, because I want to make sure we address the elephants in the room. But to your question, I think my background actually lends perfectly to what I'm doing with Youth Franchise Brands currently. I've been in the franchising space for 17 years. I've been on the agency side, working with franchisees and franchisors directly. I've been a franchise operator. I have been the CMO for a brand. I've been the CEO of a brand, led through acquisition and joining a platform. I joined another group as a CMO, was promoted to CEO, led that group through an acquisition, joining a larger platform. And now, as you mentioned, with my background in education, youth services, franchising agency work. I've been poached to be the CEO of Youth Franchise Brands, which I'm excited has two brands under umbrella currently and hopefully adding a third or fourth very soon. That is awesome. So um the two brands that you're referencing are Young Chefs Academy or YCA. I know it's easier to say that for the purposes of the podcast and Flour Power Cooking Studios. So uh we are going to talk about both. I know we'll do a little bit more of a focus on YCA. um And let's start there. Tell us about those brands. What is YCA and what is Flour Power? Yeah, I mean, there are two distinct brands related to youth and family services when it comes to cooking and baking and education in the kitchen. Yes, the service is learning how to navigate a kitchen space, whether professionally or residentially, meaning we want you to feel comfortable at home knowing how to make any meal. But at the end of the day, what attracted us to both brands is that they're selling self-esteem. They're selling confidence. We're selling the belief that your child can walk into a kitchen and say, I know what to do here. I know how to navigate this. I can prepare a meal. I can take care of myself, either as a young child, a middle schooler, high schooler, or somebody leaving for college. And then of course, we serve everybody in that lifeline, their timeline with our brands, family nights out, parent get togethers, adult cooking classes. We're really here for all when it comes to food and services in that space. for kitchen related activities. Very cool. And I had the privilege of working with a husband and wife, a couple that committed to opening multiple locations within the Flour Power model uh up in Pennsylvania. So I'm really excited. I think they'll probably open their first location later this year or early next, depending on how real estate shakes out. uh so let's talk a little bit about um how does a franchise owner generate revenue in these models? Are they membership based? What are some of the different aspects where a franchise owner can generate revenue? Yeah, I mean, you nailed the first one. We are a monthly recurring revenue model and we want that predictability. So memberships is certainly the foundational piece. You want to know going into the end of May, end of June, what does my next month look like? And you have that really from memberships in regards to that predictability. And then everything that's built on top of that is additional revenue. like classes, like camps, like Parents Night Out, retail, adult education, all of those things are just the additional parts of that foundational part. Yes, one might be the kitchen or the dining room, and one might be the bedroom or master bath, but those are all things built upon the foundation of really memberships and that predictability of knowing that you are good the following month, the following quarter, because you have people that love who you are and what you're doing. Yeah, recurring revenue. It's most candidates that come to me. That's one of the first things. They either want the recurring revenue or they want a high ticket or they want some combination of both. So um let's talk about staffing. This is a brick and mortar model. We need people in there to kind of service the consumer. What does the staffing model look like for a franchise owner? Yeah, we have a lot of people that want to be owner-operators. They want to be in the space. They want to be working with children directly, teaching kids, engaging with the families. They are there to be the one that raises their hand and says, I am the owner, I'm the one that's gonna teach you, I'm gonna be the one that takes care of you. And then of course, like executive models, you have people that say, I might not be the face for this, but I certainly know somebody that could be. That's great when owners recognize that. A lot of owners, of course, believe I can do all of these things and sometimes it's good to know where your strengths lie. Similar to building the house, I might know how to do plumbing and know how to do light electrical work. that doesn't mean I'm gonna be the GC and do it all. I wanna make sure I know who is excellent at certain parts and who can do what to really benefit the business. And so you generally have either the owner operator or the executive model where they bring in a manager to sort of run the whole show. And then in most of our locations, you find three to five sort of part-time people that are coming in to help with the children, help with the families, help with curriculum and actual education services. oh So is experience in culinary arts a prerequisite for the GM or the owner or can that be taught? I love that you asked that. Absolutely not required. We would not just be looking for people that have experience in a kitchen. We want to be able to teach you how not just to be the best chef, but also how to be the educator when it comes to interacting with youth. And there's a lot of things that we might teach you that are outside of the kitchen norms because you want to keep them engaged. You want to keep them entertained. but you also want to make your curriculum and lessons digestible. So the kids are walking away going, oh, that's what I'm taking away from today's course. And that might be hard if you come in generally going, I'm a chef, I know how to cook already. Yeah, I can see how like the, it's an entertainment business, right? You want to make sure that the kids have a great time. They're like fired up about it. They're telling their friends about it. The parents, there's a buzz going, so. I could see that that's a pretty, like charisma, know, having a really good, you know, outgoing personality is gonna work well for an owner that wants to connect with the community and build relationships and kind of make this kind of a centerpiece of the community. You nailed it. It's about the charisma. It's about the experience or "Rizz", as the kids say in the actual space or for anyone that has teens in their home. But this is a experience based business. You nailed it 100%. Not just for the people coming into the space. This is an experience from every interaction. I want our owners to be able to focus on that customer experience, but also that experience when it comes to creating a reputation in their market or the relationships that they're creating in their market by really being out and interacting. And again, that I statement of being able to raise their hand and say, I am the owner of this business. I am located here. I am going to take care of you. Whether it's that owner teaching the courses or an educator, master chef teaching the courses that we've trained and what we're doing. But it is about the experience. It is about selling self-esteem. It is about building confidence in kids. And that's why so many of our owners are so happy with the work they get to do day to day. Yeah, sounds very fulfilling. So let's take it a step further. Someone like loves the model, wants to become an owner. What does a day in the life look like for an owner? And I'm sure that differs depending on if they're in it as the owner operator or if they're doing an executive model and they hire a GM. just, can you give us a little flavor for what that might look like? Yeah, hopefully what they would say is a lot of fun. uh Most of our locations are open for a half day. So afternoon, after school is over, we do have some locations that are open during the day, servicing homeschool programs, corporate training, corporate partnerships, corporate team building events. So you do have some that are open during the day for set occasions. But for most groups, they're operating when school is out as sort of that third space for kids to come to. So before you actually open your doors, it's a little bit of prep, a little bit of admin, you're getting ingredients for certain recipes, you're making sure curriculum is good, you're obviously sanitizing, making sure cleaning is proper, responding to emails, questions, calls from parents, prospective members, doing sort of the day-to-day of talking about your business. And then depending upon if you are teaching the course or having someone else, once doors open, you are prepared for classes, you're prepared for camps, you're prepared for birthday parties, and we have all of that operational support to make sure you know how to do that day-to-day. It does sound like really fun business, but obviously we'll get to the economics here in a little bit. um So let's talk about what corporate, you know, your team does to support the owner, you know, in a brick and mortar kind of cooking concept like this, we have a site selection and construction project, and then we have the ongoing operations, which requires training and then ongoing support. Can you touch on kind of both of those aspects on how you guys jump in and help an owner that has kind of picked your brands? to kind of get it off the ground, get a great site and kind of get things all ready to go as it relates to the grand opening and beyond. Yeah, absolutely. And I think anyone that has worked with me in any system will tell you that I have a common phrase and that is, how can we act as your aspirin? I believe it is the role of the franchisor to find the pain points that a franchisee is experiencing and try to solve those. What are we solving for? What are we working towards? And it's that old adage of the franchisor only does well if the franchisee does well, so it's in our best interest. When it comes to support, I feel very confident in saying we are one of the systems that will have the best support when it comes to acting as an aspirin for our franchisees. That is everything from the real estate, site selection, project management, build out, lease negotiation, TI, all of those things that go from, hey, this is where I want to be so I can get doors open. Once doors are open, and even before that, you have marketing and operational support, sales coaching, leadership training, the idea of role play, figuring out things that might happen, objection overcoming, how to handle those. We really step in to make sure that the owner can focus on the customer experience. And again, the two things I touched on, building a reputation and a relationship in their market. We want to be able to take all the other items off their plate and truly act as their aspirin. So again, I feel very confident in saying that when it comes to support, all of the brands under Youth Franchise Brands umbrella really do all of those things to again, try to allow you to focus on just the customer experience. Awesome. So let's compartmentalize this a little bit. The, find a great site, constructions underway or we're about to open. Do you guys do like on-site training or is it all done through kind of a learning academy? How does that look when we're launching the business and we're about to kind of open our doors. Yeah, we believe it's a perfect combination of both. We have a lot of pre-training guides and materials, best practices, coaching cards, things that can exist and be digested virtually. We have that through an LMS learning management system. So you have those videos, you have those tools available so that when we actually come on site at your location during launch, during that opening week, and even before that at training, whether that's done at our HQ. or at another facility near you, you're really understanding how to focus on the experience that you are going to be providing, or your manager, or head chef is going to be providing once they're in the classroom. So a lot of our, these are the things for your point of sale, these are the day-to-day operations, these are bookkeeping, the things that really can be learned in advance through video, asynchronous kind of type idea versus non-synchronous, you can take those on. at your own pace, your own rate, knowing that those videos and those guides will always be available. That way when we come to meet you, and we are face to face in person, we are really focusing on the things that you will be doing face to face once you're in your studio, once you're in your location. And again, a lot of that is, how do you bring the curriculum to life? How do you create an engaging experience? We like to use the word remarkable in the truest sense of the word. How do you create an experience that people are gonna leave and go and talk about? and tell their friends, go and tell family, go and tell other kids, my goodness, I just went to that place that was incredible. How do you create that remarkable experience? And then make it engaging so that they'll refer you. And again, tell other people and wanna come back so they're retained. There's a lot of Rs in our system, but when we talk about the actual training, it's on focusing on all of those hands-on, face-to-face experiences, which are the things that AI and the robots will never be able to take away from us. until a drone can come in and teach somebody how to cook. That's why we focus on the actual engagement and experience when it comes to our training. Yeah. And I wanted to touch a little bit more on the kind of classroom management technology, kind of the backbone of the business. You mentioned the curriculum, like curriculum is where you win and lose in this business, right? You have to keep it interesting. You have to keep it current, relevant, engaging for the kids. um And then also it's a business. So you have to have a great CRM and a great way to communicate with the families. Can you talk a little bit about those technology tools that help the owner succeed so they can just focus on operating a great business? Yeah, I think the nice part talking about YCA specifically is you're talking about a brand that's been around for 21 years. So they've sort of been doing this before some of the tech even existed. And this is why we look at this brand as sort of an AI enhancement versus something that's the red of AI. You know, again, I jokingly say until the drones come and teach you to make scrambled eggs or quesadilla or pizza, you know, we're probably pretty good when it comes to needing to learn how to cook. And so this is something where, as we've learned from 21 years of doing this, there are certain things that we know that make sense, not just in the classroom schedule, because we understand the attention spans of children at different stages of development, but we also understand how tech can enhance the experience. certain things that we can do from customer touch points from the time they find us online to the time they come in to our locations to the time they leave. And so there's a lot of, I don't want to say reliance on technology, but there's systems built in place to again act as your aspirin. So a lot of the things that you maybe needed to do when it was just pen and paper can now be done virtually or digitally through texts, through email, through check-in, through apps, through appointment reminders. the things that sort of take a lot of that heavy lifting off the plate of an owner or operator. Yeah, very cool. That makes a lot of sense. So uh Leigh, who are you looking for in a franchise owner? Because you got to match that right person. Obviously, you have to be capitalized. This is a construction project, and there's working capital involved for marketing and for labor and everything like that. But who's a good fit for your brands? Yeah, I think ultimately, you'll always hear the word process-driven, process-oriented. But for us, it's really people-people. Are you someone that's engaging? Are you somebody that people want to talk to? Are you somebody that people want to be around? We find that we have a lot of educators or people that have been in the food service and hospitality space coming to us, and that's great, because they are usually people-people. They like being around other folks. They like being around children. They like learning themselves and being able to reteach that. Sort of a train-the-trainer model in that aspect. Teachers that's ultimately what you're doing is you are teaching a service But at the end of the day that people people kind of person which sounds ridiculous They're the one that's going to be successful at really building up the self-esteem and giving the confidence to children and if you are somebody that doesn't know I'd have a conversation or interact with other folks This probably isn't the system for you because you're going to be dealing with kids You're to be dealing with the parents of kids sometimes the grandparents of kids But we want to make sure you're excited about that. And waking up every day going, my God, I love this business because I have 40 kids, 20 kids, 50 kids walking in super excited about the activity they're going to do. And I get to talk with them, I get to interact with them, I get to teach them. And then I also get to talk to the parents and families in my community. And again, if you're not interested in creating a great experience and you don't care about your reputation or relationship in the market, this probably isn't for you. We want people, people. Yeah, I get that. And I think someone that brings that higher energy to the table on a consistent basis. Same thing in the classroom, right? Like you have kids, I have kids. Like if they have a teacher that's engaging and interesting and high energy, they tend to learn more and enjoy themselves more. And I can see that translating really well into your business model. So let's talk a little bit about kind of the state of the company, your national footprint. How many academies are open? How many are operating? How many are in various stages of development? Yeah, we have 50 plus locations open around the country right now. We're in 32 states. And is that with the YCA brand? That's with both brands included. Both brands together. Yeah. So, you know, a lot of focus in the Southeast and Central States. And we are obviously getting ready to open more. As you touched on, the great owners in the King of Prussia area outside of Philadelphia, they have three locations that will be coming to market over the next two months and year extended. We have another location that's opening next Monday. So we're really excited about the growth and what we see in the system. Yeah. And what's cool about that is, uh I mean, first of all, King of Prussia area is great, know, great demographics. I grew up about a half hour east of there in a small town called Yardley PA. You have one there on Oxford Valley Road as well and the YCA side. So that's pretty cool. uh So let's talk about like Item 6. uh Candidates want to talk about that because you know when they look at getting into an independent business versus a franchise they're trying to figure out the value proposition. What are my ongoing fees? What am I getting for those? I know we can't cover all that in the conversation today but can you give us an idea of what the Item 6 looks like for your brands? Yeah fairly standard. You're looking at a six percent gross royalty and then a two percent for national brand fund and that's where I feel the most confident when it comes to national brand fund and what we actually invest in to support. positive ROI related to that spend for client acquisition. And that's the focus of our brand fund spend is, again, how do we generate people to your brick and mortar so you can focus on the client experience and retain them, educate them, keep them coming back, and then telling other people in their community, this place is amazing, you have to go. Yeah, I love it. So let's talk item seven. um You know, when we're talking about a construction project, there's going to be a variance in cost based on the condition of the space. What's the guidance we're giving owners for these brands as it relates to the low end and the high end to get into youth franchise brands? Yeah, you're, you're a sub $400,000 brand. So you're actually a sub $390,000 brand. If we want to get into the actual specifics in the FDD, uh, and you can get into one, you know, on the low end for around $240,000. Of course, when you talk about capitalization and runway, of course, I would go on the higher end just for safety sake, especially with what I'm seeing in regards to SBA and funding and certain banks saying, actually, we'll only fund loans and agreements up to this amount as a baseline. You need this to be here to be able for us to make this loan go through. So on our small side, you do see people that are coming in and funding it themselves or with family money. You do see some people with the Robs and the HELOC option. But when it comes to the SBA, obviously the higher side of the item seven, I'm seeing in most systems that making the most sense. Yeah. So even if they do SBA and they're doing like a 20% cash injection and 80% kind of debt service, you can get into the deal for under $100,000. And I think that opens up the opportunity to a lot of potential franchise owners. Yeah, absolutely. And being able to sell finance for under a quarter million, of course, a nice opportunity for people that do have, you know, sort of cash available. And I understand not everyone's in that position, but it does make it a very easy system to be introduced to. That makes sense. So let's talk about earnings. Any item 19 data you're able to share with us today? Well, of course, I want to share the high end that we have a studio in New Jersey doing over $700,000. I would love to focus on just them and only them. But it's really broken down, you'll see in our FDD to quartiles. We want to get people an understanding. not just about the markets, the timeline and the pipeline of which they've been in the system, what their earnings potential are, but you'll see a really nice cash on cash return from a lower investment to be in this type of brand and this type of vertical and really great earning potential. Again, I'll focus on the New Jersey $700,000 over last year. Very cool. Um, and I guess, you know, any candidate that's evaluating the brands can look at the Item 7, but I like how you kind of break into the quartiles. So you can say, all right, if I'm a top producer, here's what my data is going to look like. And if I'm in the bottom, this is what it's going to look like on an average. then, you know, candidates can kind of align themselves with an investor type that matches their situation. So if they're going to be owner operator, let's talk to owner operators and see how they're faring. If I'm an executive model, let's talk to someone that's kind of, you know, has GM on the payroll and how's that look and what's their time involvement? I think that's a pretty good way to size up the opportunity and see if it's a fit. Oh, you nailed it. And you'll also see in our table three, the margins. We want people to truly understand what can I make from this investment? Yes, you're telling me all this money's here, but are they making money? Are they profitable? Not just are they producing revenue? And so that's why I think our item 19 is very solid in the sense that you can see what our average studio is making as far as actual margin. And then what you'd see the median is from the folks that do some of the things you just discussed, wrap lower fixed costs and rent on the building or running it themselves related to labor items. All of that's disclosed in our FDD. Very cool. This has been great, Leigh. Any other information you want to add to the mix before we wrap up today? Just mostly that I do have hair. I've been going in and out of the camera shot to anyone that's watching this video That's going I thought he was bald in the beginning You can see the blur lines from the video are here, but obviously I do want to say this has been fantastic Thank you so much for having me I encourage anyone that's listening to listen to your other episodes and check out all that you're doing on your podcast well, thanks so much Leigh appreciate the plug and we will have an image card that goes out with the audio episode to prove to everyone you have a full luscious Set of hair so well some people might go that guy looks like Pitbull so you know Hey, it might not be a bad look for you If anyone listening wants to connect with Leigh and his team to learn more about youth franchise brands Young Chefs Academy or Flour Power contact me at FranchiseQB.com or on X @QBFranchiseQB. I'll get you connected. Thank you so much Leigh for taking the time to discuss Youth Franchise Brands with us today. Thank you. This was fantastic. Have a great day everyone. All right. Thanks 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 @QBFranchiseQB and join us every week for a new episode. See you next time. Visit Franchiseqb.com to 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.