Episode #28, OG Ep: Franchises vs. Independent Brokerages

[00:00:00] Someone had asked me on a podcast before and said, like, why did you do it? And how does it feel today?

[00:00:07] And I explained why I did it just like I did today. But I said, do you know how it feels? It wake up every day, very satisfied that I've come this far. And I've been able to carry it on my shoulders as well as my partner shoulders.

[00:00:19] But the fact that we did it with little capital investment, a whole lot of hard work, and a lot of imagination to me, you know, just says it all. And that's what I think makes it a huge advantage.

[00:00:32] So the one saying is, you know, you started on a shoe string budget. Yep. I say mine's dental floss. That's literally, that's here. I mean, doing everything from scratch. Welcome to the podcast dedicated to real estate insurance and everything in between.

[00:00:54] Join us as we take you along our own brokerage building journeys with additional wisdom from our network of business experts. Welcome to Bricks and Risk. Everyone, welcome to another edition of Bricks and Risk. I am Tim Garry.

[00:01:16] I'm Sean Mooney and we are live here to one five labs with something like that. We're actually in Manningok. So that's pretty cool. It's section of Philadelphia. But let's talk about this today, Sean.

[00:01:31] So you're an insurance. I'm in real estate. We both own businesses. We both had the question before we start our businesses, which way do you want to start your business? You want to be a

[00:01:46] business owner of a franchise system or do you want to be a business owner of an independent company? And this is relevant in both of our industries. So me being in real estate, you know,

[00:01:58] some of the franchise companies would be a color Williams or a cobble banker, essentially 21. You max everyone knows these names in your business. I call them big box insurance. Ooh, we say big box shops. Yeah. Yeah. The big box insurance, who's big box insurance to you?

[00:02:17] All state, state form. Okay. So let's start with you. You obviously had to think about it. You worked for big box insurance prior to starting your own business. So it's like, if anything you were comfortable with it, you worked in that environment for 10 years. You knew the systems.

[00:02:38] You understood the branding, you know, what they gave you as buying into the system. Why did you choose to go the independent route? So one step further, way easier to take what I was doing at the big

[00:02:57] box insurance and you knew everything. Yeah. I mean, I was in the systems. I could do it, you know, blindfolded because it's the repetition of it. Yeah. And you're only doing one carrier, one system over and over and over and over. So for me, that was a big

[00:03:22] part of my decision making. Okay. It had to be right. So like, did this for eight years with this company? I actually worked for two. So I worked for four days. They found one else there, right? Yeah. So two

[00:03:33] years with one, eight years with another one. So that was kind of baked into my decision making as well. On top of that, when you start with one of those companies, your seeded a book of business.

[00:03:51] Oh, would you even make it? They actually give you a book of business. Well, ones give a starting point. One's given sometimes and one you would purchase. So kind of two different

[00:04:01] flavors of how I did not know that. Yeah. Two different flavors of how you would kind of get out of the gate and open up. Wow. The agency. That's pretty cool. And still, and still you worked in that system.

[00:04:15] Yep. Here is a list of clients. Yep. It potentially for that comes with the system. Maybe you don't have to buy it. Revenue. Yeah. Revenue. Okay. One. Yep. Here are your residuals, I guess. Turnkey. Yep.

[00:04:31] And you're like, no. Nope. So again, why? Why did you decide to do mooney insurance brokers? I mean, you got a sweet last name like let's be honest and there's nothing wrong with being Irish. I mean, I am sure. So Dylan, Dylan, right? Let's talk about

[00:04:48] why you truly made the decision to do that. So I think it, I think it comes down to a couple different reasons why I decided to go that route. I think the the most glaring one for me,

[00:05:03] the one that kind of stood out the most was with them, everything felt to me like you had to conform. Yep. This is our system. This is the way we do it and don't step out of it. Whether

[00:05:21] you like it or not, you're just buying into yes I will follow orders and fall online. Yeah. And to me, I can not my thing. I kind of go the other way in life. Yeah. And it's just kind of

[00:05:39] you don't fall online. You think outside the box, you've always been like that. We've known each other for a long time. I feel like you've always been like that in a very good way. It's

[00:05:48] a good way to be in business. It almost gets you, so here's a great example. Like, you know, you think you're being a business owner, you're deciding to own your own business. That's a very

[00:05:59] entrepreneurial thing just because you buy a book of business or a franchise system from like a state farm or an all state doesn't mean you're not an entrepreneur. Because you're going on your own, you're taking a lot of risk, you're putting capital, you know, you're starting probably

[00:06:13] not where you want to be salary-wise because you have to build up to it. But there's something different about going the independent route. And in my own personal opinion, I feel like that's because

[00:06:28] you feel like you can create the brand, the systems, the marketing, you know, the revenue, control your expenses. Not have to say like this is where we get our printing done or like

[00:06:44] this is what I have to do as part of the system. Like, it's a lot of trial and error. Yep, like again you could spend more money doing it that way. You can definitely spend way more time

[00:06:54] because the system is the system. It's been tried true and tested. Therefore when someone says, I'm interested in opening up a franchise, you're basically getting a business in a box. Here you go. Here's your business and this is worked for these 10 reasons, 100 reasons. Would you agree with that?

[00:07:11] 1,000%. And not only that but many people that go that route are like hugely successful. Exactly. They make a ton of money. It's like- But less time. But grow their businesses and do everything,

[00:07:27] you know, within the structure of the franchise model. And it works. Yeah. I just think for me, I always looked at, you know, the limitations that were in front of me rather than the,

[00:07:41] you know, potential for, you know, growth. Right. And I think part of that was like when I worked for one, it was like, you weren't allowed to sell business insurance. And I'm like, well, you much risk? No, just wasn't in their, you know, there's like,

[00:08:00] that's not our lane. Yeah. We don't want to offer that. Yeah. It was wanted to just stick within their, I guess, P and C lane. Yeah. And so for me it was like, wait, why wouldn't you want to add on?

[00:08:14] What a fun of my client's own business and says, not only do you ensure my car in my home, can you ensure my business? And we had that a lot. We had a lot of people come to us with a knee

[00:08:24] for business insurance or whatever. And literally would send them down the street to the broker right that would gladly take care of them and have all the access, the resources to,

[00:08:40] bring them on as a client. All right. So let's go back to like one of your reasons was, hey, like it's conforming versus not conforming. Yep. Then we talked about, hey, like maybe you have

[00:08:49] the wear with all or the confidence to say, I think I can figure this out. Were there any other reasons why you felt like the franchise system was going to not really, I don't want to say

[00:09:03] not deliver on your goals, but it just wasn't a good fit for you. Was there anything else, you know, being in it 10 years, like and seeing other people do it from like the, I own this

[00:09:13] office. I own this branch of state farm, let's say, was there anything else that like you saw or witnessed or like anything you ever experienced in your 10 years that you're like,

[00:09:21] yeah, this really is never going to be for me. You know, there are a lot of things. A lot of little things probably. Well, nothing that kind of stands out the way that, you know,

[00:09:36] the others do. Yeah. You know, that I referenced it just, you got to do it this way. I mean, there was a lot of examples of that. You know, I give business insurance as one. It's like it doesn't fit,

[00:09:46] goes somewhere else. But the way they market the brand it, you know, that they would come in and say, you need to pinch your walls this color. You need to buy this furniture. I mean, just,

[00:09:55] yeah, to me it's, it's just like, I get it to a certain extent like you, because they're protected their brand right? Like they want their brand exactly to be a certain way to be perceived as

[00:10:08] certainly received by clients a certain way. And I guess I thought like, why did they get to say and not me, they're controlling their brand is really what they're doing through you. Right.

[00:10:19] Yeah, and I would agree with all that too. So even for me, so, you know, how's that? How's that kind of parallel with with you, like real estate to insurance and kind of where you worked

[00:10:30] and some similarities there, maybe some big differences and, you know, some different reasons why you said, uh, I want to go here. Yeah, there were a few, a few that relate to that, meaning

[00:10:42] like let's say when I got my broker's license and this didn't happen, but let's say, I was like, hey, I'm thinking about opening up a remax. You know, remax attracts productive agents because they

[00:10:52] have to pay rent. So no one's going to pay rent on their space in your remax office unless you're doing business. So it was like a cool model in 30, 40 years old, like think about that.

[00:11:05] Lots of change in real estate last 34 years, lots of change in the last 10 years. And I've been doing this 14 years. I think for me, one of the things that I looked at when I got in a real estate

[00:11:15] which separated me is the average age of a realtor at the time when I got in. It may be different now, but let's assume it's similar. It was 55 years old. That's the average, meaning half of them

[00:11:25] are older and like just think about that. And I felt like a lot of these big companies, unfortunately, the franchise companies, they cater to an older style of thinking, meaning you're going to come in and you're going to make cold calls with these scripts

[00:11:44] because they're proven. And you're going to sit through this boot camp because it's proven. And you're going to have to do this training with like a mentor your first year or two because it's proven. And hopefully after a couple years, you're standing on your own two feet.

[00:12:00] And one of the stats in real estate that always got to me was that 87% of real estate agents will get out of the business in five years or less. Which again, I'm sure insurance is high as well.

[00:12:13] And I looked at it as like I kind of felt like that was a little bit perpetuated by the bigger the big buck shops as we call them. Nothing against them but I just didn't really agree with that.

[00:12:25] Plus I also looked at it's like, I feel like there's a fairly low barrier of entry. Like once I get my broker's license, like the state doesn't require a ton. It's like hey, you need a space with a

[00:12:33] private room and then you need a space for again, open space for working private room for doing business, let's say a closing or a meeting or something like that. And you could do that in which

[00:12:44] way you want, like we started in a co-working space. Which I don't think anyone had really done at least no one I know of had started their headquarters in Philadelphia in a co-working space.

[00:12:52] And I don't know if we started a remax that they would have gone for that to be quite honest with you. I think it would have been like this is an acceptable. You need to be, well first of all,

[00:13:02] you might not be able to do it where you want to do it. Maybe you have to be a big thing and real estate is like location. And it's like you can't be doing business right here. I know the

[00:13:10] co-working space is here but you can't do it because you're infringing on someone else's territory. Was that like a remax is within a certain amount of miles? Yeah, so they all have their territories.

[00:13:21] And which is weird too because your clients could come from the pokenos. Yeah, 30, 40 year-old thinking. And so I think what really encouraged me to go the independent route aside from I agree with you,

[00:13:35] like again, I think I've always been a little bit more non-conforming. Like, I always followed the rules. I kept my grades up. I finished college on time. You use an iPhone? I do use an iPhone.

[00:13:46] And this is something we disagree about. You've been using a droid prior to that you were probably using a blackberry. And it sucks. But just getting to that point where I'm like, I don't really agree

[00:14:00] with the average age being so high. Like something wrong with that but it's like, hey, there's not a 25, somethings and 35 somethings. You want to buy houses who maybe don't want to work with someone

[00:14:09] twice their age. Yeah. And I looked at as like if we could look at our companies being a little bit younger and a little more progressive because we were and also looking at it from a different way

[00:14:20] and one of those perspectives was, you know, I wanted to help agents grow their business through relationships having what I always called a book of business which that was like how I did it

[00:14:32] myself like going in and using my relationships in my own ways, creating my own marketing content and doing it away that I just had to trial an error. They didn't give me a script and they didn't

[00:14:43] do anything and back then when I was doing it, no one was really doing it. Now everyone does it. Not saying I pioneered that but I will say that, you know, even back then they're like, you

[00:14:52] sit for time and answer the phone. Like who's calling the phone in 2010 or who's really walking into the office in 2010? Like it's at that time was 25, 30 year old thinking and I think when

[00:15:07] I'm going to have like low bar of entry we can do this the way we want and we could be different and we're going to attract certain people to that brand because it's different than all of them

[00:15:19] and they all follow that same model and most of them have the 87% rule. Which again I feel like is almost a lack of really showing people how to do this and how to succeed.

[00:15:28] So that was a big motivator for me knowing that if I decided to buy a remax let's say or anything or a killer Williams let's say, what if said this is how you recruit, this is how you train

[00:15:42] like this is how you should be doing business and I just saw a lot of problems with that. We greatly appreciate your time and trust now back to the show. As things change so like everything evolves everything changes when you started maybe it was

[00:16:30] the real estate industry was tilted that way is there anybody new on the scene is there any like technology forward that kind of like scrap that old world model that you've seen

[00:16:47] yeah I got a really good example so when I first started too whether you had a big whether you were at a big box shop or at a small independent brokerage was just where I started

[00:16:58] the paperwork was still written like well let me backtrack you would get the paperwork into PDFs type it all in but then you had to either print it out get it in signed and then have

[00:17:10] it scanned back to you or you would just be like I'll just drop by your house it's much easier for me to just start or let's meet at a coffee shop then I can explain the paperwork then you

[00:17:19] can initial we don't miss anything and it wasn't tells about almost five six years in that there was like there's this thing called docu sign and I'm like what a wonderful invention this is and even in the beginning we were like we're going paperless like one of the

[00:17:38] first steps we took because again doing this about five six years in having that technology all the other broages were still doing paper files paper audits storing them in drawers I know that because I did business will definitely walk out with their stack of paper and I'm like

[00:17:53] I would tell the title coming can you just scan then email to me and they're like don't you know like do you want two copies I'm like I don't need any copies can you just scan an email

[00:18:03] what you have and that was like a perfect example it's like when we were going paperless this is nine years ago people are like what how are you is that legal I'm like yes it's legal I check with

[00:18:16] the state well what what if you get audited they look at the digital files I have you know I keep them on a hard drive to keep them safe but they all live in the cloud yep you know

[00:18:26] and they've been lived in the cloud back then I just find that that was also another reason like going independent to me versus the franchise meant using using your intelligence to try and problem solve the inefficiencies in the industry and when I looked at those inefficiencies I

[00:18:46] also looked at that is like that affects the customer experience the client experience because if I always have to tell in the print it and initially and get like I don't have a scan I don't

[00:18:55] have a printer then then it's like okay the will meet somewhere now they got to drive somewhere look presentable sit down by a cup of coffee possibly just to get their paper work sign what if the

[00:19:05] offer doesn't get accepted then I got to go back scan I put it all in it was like it was madness for my first five years once we embraced paperless in our office like if I went back to my first

[00:19:17] one page website a copper I wish I could still see that I think one of the things was we're filling the papers we're a paperless office and people like why nine years ago so think about that

[00:19:30] and here's another I want to shift a little bit too because you know we both love this topic what are the advantages so to you you've been doing your independent brokerage

[00:19:42] or eleven years right I've been doing mine for nine if you had the turn back time let's just say you're you're thinking about doing more of a franchise big box insurance what do you think

[00:19:55] the advantages would have been doing that back then to being eleven years in what would be the advantages be of the going big box yeah like if you if you didn't like let's say you you can form

[00:20:10] and you were the big box shops for ten years do you think there's got to be some advantages there's pros and cons of everything what would be some of the advantages to doing franchise

[00:20:19] there's people that are going to listen to this they work for franchises or they like the franchise system like they look at that is you know what like that's the way I would I would prefer to get

[00:20:27] a business in a box so so speak to that what do you think some advantages would be to having a franchise some you know there's agents out there that kill it you know they they find their way in this system

[00:20:40] they know what works and they just double down on they don't they don't care about the business that they can't write you know so I think there's there's a there's like an awesome advantage of going that way it's like I'm not worried about that that's true there's no

[00:20:59] sense of we don't do it go find someone else take a referral fee I guess could you do that you do that insurance there's more just like passing along because you could absolutely do that

[00:21:09] got it but usually the premiums aren't you know right big enough but yeah I mean the ease of doing business when you're just with one carrier is is awesome more efficient yeah and then like I gave you that example it was like I could literally have the phone

[00:21:33] and like I'm into the customers account before they even like set anything right and it's in front of me and I'm like ahead of them on the phone so so knowing the systems and ease of doing business because it's one I think another advantage is like the quickness

[00:21:54] right so like you know as soon as they call if they're going to be a client of yours or not you know you know exactly if they're fitting your appetite so they're in their out

[00:22:08] and I think that's you know having that ability is is a definite advantage if you go that franchise model that franchise round for sure I'll go over one two so you know looking at it from a real

[00:22:23] state standpoint here's some things that took a lot of time so you start a brokerage from scratch okay one of the first things you have to do you have to have a local that takes time takes money

[00:22:36] have to think about a website you have to have business cards you have to set up all your social media you have to do everything from scratch and back then when it was a little bit more paper based

[00:22:49] and still to the set I think people still do you have an open house you have an open house sheet we don't have one we did carbon copy application wow yeah for real that's what you did

[00:23:00] yeah look like you'd have the client meet you in the office yeah and it was like triple kit so you'd want for them yeah one for you one for the house we would keep one one goes the client

[00:23:11] and then you'd have to send one back to home office mail you'd have to mail it back to home office as like a completed application you stuff enveloped you know yeah weighing them because you're like oh

[00:23:23] how many pages on the back of the case you put it all I can only do eight this one's got 10 yeah and it was like going way back yeah well now it's even like that but you know I think I think a time saver for

[00:23:36] considering like a franchise versus an independent and insurance or in real estate is not only like the brand is done there there is a story to the brand you know there's content like you

[00:23:49] have content not only that you have all your marketing pieces you have your you know point of sale stuff you have you know billboard material placard material flyer material you know again another thing

[00:24:04] in real estate hey we we have to have signs on the street when we sell a home and we had to design a sign so now we have the design a logo it's like okay like what does the

[00:24:15] sign look like you know how big is it like there was a soup to nuts soup to nuts and I would say that's a big advantage because again I'll go back to starting a remax we have three different

[00:24:27] sign options for you what do you like ABRC are you clean in modern or you will old school and traditional or you minimalist like and they have that they probably have more than that so

[00:24:38] so they cater to that because they're saving you time so I think I think a lot of the marketing stuff you know from like the a pro of a franchise it saves you time and again if you're saving

[00:24:49] you time guess what you have time to do you have time to go right more business but to your point even though it saves you time do you believe in what you're putting out there like do you like

[00:25:02] that flyer like for your example earlier do you like that office furniture like is that you or is that them and I know it's more about them when it comes down to the franchise because that's why

[00:25:14] you're doing it you don't want to think about it you want to just say just tell me what to do tell me where I get my furniture how much does a cost like there's a website for everything I'm sure

[00:25:24] got to have been done this but I'm assuming these okay here's a furniture go pay for that you know here's the here's the look behind the front desk go pay for that here's the paint

[00:25:34] you know we even have a contracting company that can come out and probably set it up for you so they have they have thought of everything because again in a franchise system they want to sell you all

[00:25:42] that they want to sell you the material and the paint and this and this service from doing it so I think those are advantages like for sure here's another big one that I didn't hit on but it's

[00:25:54] yeah it's actually a really big one is the money that they spend on marketing yeah the brand recognition is can't compete with that it helps like those are global brands yeah so when you open up a state farm office in it let's say in a neighborhood like manny

[00:26:18] young it's like everyone in the world knows that brand which will help build trust yep if they're just walking down the street yeah that's a really good point if it's mooney insurance brokers I'm gonna have to take out their phone and be like mooney insurance brokers reviews

[00:26:32] yeah and be like what what are these guys like go to google good and then find out where a google certified insurance it that's a fantastic point and also think I also think

[00:26:45] there's an advantage in today's day and age to discover the brand versus assume it's a good brand because let's say let's go back to the franchise let's say you assume it's a good brand because it's a superboat commercials they have billboards there's offices in every neighborhood every town

[00:27:00] every city and they expect you to have trust based on that but you're still gonna deal with bill Smith or Sally Jones when you either call or email or text whatever you're doing to like

[00:27:13] understand and get a quote and figure out how much things cost and do you like it and there's no guarantee you're going to like them what's nice about having independent uh brokerages independent

[00:27:25] shops for you as well as for me on my end you know part of my brand's identity my brand's story is is timgarity so it's nice that copper hill can can be recognized in this local market because we're

[00:27:39] only around here it's more recognizable in the city I would say than the suburbs but when people see it not only do they have an opinion of of the brokerage which again is a little bit more authentic

[00:27:50] unique since a homegrown local company but they also will have like an opinion of myself and my team and I feel like in today's day and age when people want authenticity they want trust there's too much

[00:28:05] noise there's too many ads I mean every new story you look at on your phone there's pop ups social media is the same again TV has gotten better with DVR and on demand but still like

[00:28:19] you know there's a lot of noise out there so almost allowing that client to walk by the mooney insurance broker's office let's say pull out their phone check you out I think that's an

[00:28:29] advantage today where maybe it wasn't 20 years ago or 30 years ago when they didn't really have this opportunity all they could hang their hat on was you know all states are everywhere stay farms

[00:28:41] everywhere they must be good. they must be good and if they landed a decent you know human being when they connected with them then even better but I think the wonderful thing about how we did it

[00:28:57] the way we did it is one we have a say day one as to what's the story you know why are we doing what we're doing and where do we want to go we also have a lot of control over the marketing

[00:29:09] in the customer experience so if you don't like that furniture from stay farm you don't have to get it at mooney insurance broker because you could have no furniture so you can do it any

[00:29:19] which way you want who says you need a front desk in today's bar. pretty sweet people come in for cocktails cocktails and quotes literally no that's an event right there I know how cocktails and quotes

[00:29:33] I get 10% whatever you make your deck piece but now you get to create it and I think like you said is years ago maybe it didn't matter that much you know what I mean maybe you know you didn't have the

[00:29:46] opportunity to use social media as a vehicle to like broadcast your brand to kind of sell your story, sell your company sell your you know whatever you're offering but nowadays you do have that and it allows us to compete you know we're allowed to kind of like

[00:30:12] but our best for level it's a level playing field now whereas without technology it wasn't you you were at a disadvantage yep like you truly had to be like visible in like a community or like be on a board or beyond being involved with your school

[00:30:28] or the park system like that was that's the old school way now again that stuff so works today but we have the added advantage of of again competing on a similar marketing level

[00:30:40] to the big companies not only that we can compete in my opinion from more of an authentic original standpoint which you're gonna you're gonna attract the people you want like just for the fact that you

[00:30:51] started moving insurance brokers from scratch as an independent brokerage and I started copper hill real estate from scratch as an independent real estate brokerage like you have a say on who

[00:31:01] you want to work with and who you don't want to work with and without big brother over your shoulder at either of those organizations that that say sales or sales you have the opportunity

[00:31:13] to truly have a say and be like I'm in control of my numbers as well as you know how I want my client base to grow also how fast do I want it to grow there really isn't an expectation

[00:31:26] so for the fact whether you're singular or have a family or just a significant other that's the only thing you got to be bringing home when you own your independent brokerage and one thing I've

[00:31:36] always said too we can we can end on this is someone had asked me on a podcast before and said like why did you do it and how does it feel today and I explained why did it just

[00:31:48] like I did today but I said do you know how it feels a wake up every day very satisfied that I've come this far and I've been able to carry on my shoulders as well as my partner shoulders

[00:31:59] but the fact that we did it with little capital investment a whole lot of hard work and a lot of imagination to me you know just says it all and that's what I think makes it a huge

[00:32:11] advantage so the one saying is you know you started on a shoe string budget yep I say mine's that literally I mean do everything from scratch not yeah and back in those days it was like

[00:32:27] you you find creative ways to do things how can I put in some hard work to get this done that's awesome well we're just gonna end on that one today guys and girls thank you for tuning into another episode of bricks and risk and we'll see you soon

[00:32:44] Thank you for joining us on another episode of bricks and risk our goals that you walk away with one or two valuable nuggets and we greatly appreciate you sharing your time with us today

[00:32:57] you can find all B&R episodes on Spotify Apple Music YouTube and anywhere else you get your podcast content until next time keep learning and keep growing