🍟 Thursday 3: Turning Trash Into Cash
🍟 Thursday 3: Turning Trash Into Cash
Plus: Commitment & The Benefits of Compounding
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Today we have an interesting lineup: with one tweet and article covering the idea of compounded efforts, and a breakdown on a franchise with very impressive numbers at scale.
Let’s get right to it 👇
One Article:
David Perell: Hugging the X-Axis:
“A life without commitment is a life where you can't take advantage of compounding curves”
This essay was a great reminder of the benefits of having a singular focus. It reminded me of two things:
The person who always switches career paths never gains expertise in a particular area
In franchises, the owners who stay committed to building locations are the ones that end up as success stories (example: Tom Cook of Pacific Bells).
Think long-term, and take advantage of compounding efforts!
One Tweet:
Jack Butcher: an example of compounding efforts
In 2021 Jack Butcher surpassed over $1M in personal revenue, because he stayed committed and reaped the benefits of his compounded efforts.
One Breakdown: College Hunks Hauling Junk
Fast Facts
Background
Founded in 2003, franchising since 2007
Based in Tampa Bay, Florida; 156 territories operating
Offers junk removal, moving, and labor services
Fees + Investment
Franchise Fee: $40,000 - $60,000 (depends on market size)
Royalty: 7%
Brand Fund: 2%
Initial Investment: $108,700 - $273,200
Financial Performance
The below information is based on 90 franchised outlets in the full year 2020
The Wolf’s Take 🍟
Average EBITDA of $214k off of at most a $273k initial investment…for a sample size of 90 franchisees, that is a super impressive system-wide performance 🔥.
At 156 territories operating, there is likely still a couple hundred available markets for this franchise. My biggest questions in general would be:
Is this industry over-saturated?
How many territories do the top performing franchisees own?
The latter question is best answered by talking to existing franchisees, while the former requires a deep-dive on the junk removal industry.
Competition is of course not a bad thing, if anything it’s typically a good sign that there is a market to support a business. However there are many competitors that saw plenty of growth over the last decade i.e. Two Men & a Truck (314 territories), Junk King (136 territories), 1-800-Got-Junk? (160 territories), etc.
This doesn’t mean the market’s full though - there’s plenty of folks who passed on Five Guys just because McDonald’s, Burger King, Wendy’s, In-N-Out, Sonic, etc. already existed.
But for me it is the question worth digging into on a macro level if you want to pursue this franchise opportunity!
Resources
The Wolf Of Everything Else 🌎
A convenience store startup just raised $100M 🤑
Apple is in serious talks with MLB to broadcast games ⚾
Cannabis compounds MIGHT help in preventing covid-19 🍃
Arby’s is giving away free milkshakes with it’s new Diablo Sandwich 🌶️
That’s it for this edition of The Wolf Report. Feel free to reply with any questions or feedback. If someone sent this your way and you haven’t subscribed yet, you can also do that below. Thanks and see you next week!
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