Franchising Success and Building Professional Relationships with Ty Brewster
Guest: Ty Brewster
Topics: Franchising, Seven Brothers Burgers
Transcript:
Chris Ressa 0:00
This is Retail Retold, the story of how that store ended up in your neighborhood. I’m your host, Chris Ressa, and I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC Management.
Welcome to Retail Retold, everyone. Today I’m joined by Ty Brewster. Ty is a broker out of Phoenix, Arizona, specializing in the franchise space. He works with Locate AI. I’m excited for him to be here. He does a lot of interesting work. He’s got a good story for us. Welcome to the show, Ty.
Ty Brewster 0:37
Thanks, Chris. I appreciate you inviting me on.
Ressa 0:42
So, no worries, man. So Ty, tell us a little bit more about who you are and what you do.
Brewster 0:46
So I’m a specialist in the franchise space, I work with about 70 different franchise brands, doing national master broker work, helping them grow around the country. Working with franchisees, we have a program with Locate AI where we track on the technology side about 200 million cell phones around the country.
And then we provide that data to our clients at no cost, in exchange for allowing us to help their franchisees work on their real estate deals, and we monetize our services with the landlord commissions that are received. So we do a similar to a Buxton service, we provide our clients with that financial analysis and location analysis service at no cost, so that we can help them grow around the country.
Ressa 1:45
Super fascinating that you provide this service that gets you in the door, and you use that and then you leverage that to let the real estate be the payer of your guys’ business versus the actual client paying for the the Locate AI service. So that’s super interesting. And so when you say you track cell phone data, and you mentioned Buxton, would you guys put yourself in the Buxton category, or more like the place or category of like, when you’re when you’re monitoring cell phones,
Brewster 2:32
I will say I would say the difference between us and Placer, when you run a Placer report, the Placer report does not have any information or artificial intelligence associated with that individual user. So for example, if I am working with Chipotle just to pull a name out of the hat, and I run a Placer report, they do not have sales data for Chipotle to understand the individual cell phones going in and out of every Chipotle, the revenue being driven by those cell phones going in and out of that location.
And they’re not able to use that to predict potential revenue from other future locations. We do provide that. So as Buxton is a system that provides location analysis, and it gives you a revenue analysis for potential locations, we are very similar to that where we will work with a company, give them revenue analysis.
Where Placer.AI does not do that with an individual company, we will actually pull your sales from all of your locations analyze the cell phone’s going in and out of each of those locations and give you revenue analysis if you have enough locations that we can analyze that.
Ressa 4:06
Got it. Yeah, the sales forecasting that Buxton does and sells to retailers. Sure. I will say this, there is sales data that Placer is coming out with and they have come out with I don’t know if you’ve seen it, check it out. It certainly is interesting, and how they’re getting that data. Okay, so I gotta ask, how do you work with 70 different brands? How’s that possible? That’s a lot.
Brewster 4:35
Yeah, we’ve got a pretty good sized team and we’re looking to build a team similar to what StarBack put together so we are unique in that we are a tenant only shop. We’re focused only on the tenant side of the business. So that is all we do is focus on these franchise brands and help them to grow.
So we can work volumes, I’m working right now with my team on over 230 transactions, and you’ve got to develop a system, you’ve got to work that system well, and you’ve got to stay on top of each of these transactions and make sure that everybody’s doing their job and keeping these things rolling.
Ressa 5:22
So, that’s super interesting. I guess the follow up to that for me is, are you hired by the franchisor or the franchisee?
Brewster 5:36
So I build a relationship with the franchisor, who then introduces me to the franchisee at the perfect time. So the franchisor does not have need for real estate, the franchisor signs a franchisee in Ankeny, Iowa, North of Dubuque, and then that franchisee at the time that they sign their franchise agreement, then they have a need for real estate. The franchisor would then introduce me to that franchisee at the time they signed their franchise agreement. And I would service the franchisee or the franchisees.
Ressa 6:15
And, got it and there are some freight you say franchisor doesn’t even need real estate there are some franchisor that’s in a franchise model that to guarantee the lease and they work on the lease and the franchisee just gets given the location.
Brewster 6:32
That is an unusual scenario, that does happen, that happens.
Ressa 6:37
Chick Fil A’s kind of like that. Chick Fil A’s kind of like that. Right?
Brewster 6:42
Chick Fil A’s as a whole other animal. I don’t work with Chick fil A.
Ressa 6:47
But then there’s McDonald’s is like that.
Brewster 6:52
Yeah, look, some of the larger ones, there’s 2000 franchise brands, you could probably name three or four of them that are like that, but that’s very, very unusual. Most franchises will sign a franchise agreement with a franchisee or a franchisee group, and then they will start looking for leased space. I help those franchisees find leased space.
Ressa 7:14
Sure. And so you’re not doing any work with the corporate groups, right? Just franchise groups, right? So like, if someone doesn’t have a franchise model like a Starbucks or Chipotle who’s not franchised, they’re just, they’re all corporate, you’re not doing that work.
Brewster 7:29
That is not my specialty. I have one client that I work with, it as a corporation. I do corporate locations, but everything else is franchise.
Ressa 7:39
And I’m gonna ask personal and if you don’t like this, we could scrap it out of the episode. Are you ready? I’m ready. So one of the things I’m curious about, are these franchisors signing an agreement with you? Do you have an exclusive agreement, or is it, and do these franchisees have to work with you?
Brewster 8:02
So, yes, I have an agreement with the franchisor, and the franchisor, if the franchisor does choose to grow and they do corporate units, which some franchisors will have up to 10% of their locations would be corporate owned units so that they can do test marketing or different things like that. They are required to use our services if we do a model for them. The franchisor is required to introduce us to the franchisee, they’re not required to use us.
It is very common that a franchisee already has a relationship in the market and they want to use the person that they have a relationship with or they might have a brother who’s a commercial real estate agents and they want to use their brother, and I’m not their brother. So we’re fine if they don’t utilize us in Tampa, Florida for Rosati’s Pizza, they they can use their brother if they choose to do that. And we’ll just work with the next franchisee that comes down the pike.
Ressa 9:16
Got it. Can you name some of the brands that you work with? Let everyone know what are some of the brands that you represent?
Brewster 9:22
Yeah, so again, Rosati’s pizza is one that we that I just mentioned, we work with a group called Sour Autism Centers. We work with Hunter Douglas Blinds we work with Benjamin Moore paints. I do all the work around the country for Flex Stretch Studios. We work with Prime IV hydration and Wellness.
We’ve, I could go on and on, literally but we’re working with number of franchised clients around the country and always adding new ones, if anybody is interested in having a conversation about how we can help. That is what we do. We are the number one ranked franchise services real estate firm in the country, according an Entrepreneur magazine in the September issue that just came out about a month and a half ago.
Ressa 10:17
All right. So how did you get into this niche of franchisees?
Brewster 10:25
So I joined about 15 years ago, I joined with a couple of partners that did all of the Cold Stone Creamery work out of Phoenix, from about the night store on so I started initially just helping them with their finances, helping them do payroll and doing some accounting work while I was actually working another job, and then started doing this full time shortly thereafter. As we rolled out, I started with some brands, actually started working in the malls doing concepts like Dark Popcorn kiosks, and Maui Wowie kiosks and kind of went from there.
Ressa 11:11
So, but like, how did you get started? Like, how does one get this? The start of doing Maui Wowie deals in a kiosk in a mall? Like how does that happen?
Brewster 11:22
So, that would be, okay, that’s an interesting question. So I partnered with a couple of guys who are doing ColdStone Creamery. I then was given a Rosati pizza transaction to do from my partners. I’m talking to Tim McCarthy, who’s my robotics pizza franchise development guy. And he says to me one day, hey, I’m not going to be in the office on Thursday, Friday, I’m going to be at a franchise show. And I said franchise show, what do you mean the franchise show? He says, well, we go to a franchise show.
And then we have a booth, and I stand in a booth. And then people come who want to open a franchise, and they talk to me about opening a franchise. And there’s a bunch of other companies that want to sell franchises. I said, so you’re in a room with 100 of my potential clients, and nobody can leave for three full days, in Anaheim, California. And I got in a car and I drove there. I stayed in Embassy Suites. And I thought, this is a magical thing.
And I’ve been doing that 15 times a year ever since.
I love that.
Yeah, it was like, it was like a kid in a candy store. I’m like, all of these people are stuck here. They can’t leave the room. And they have nothing to do but to talk to me, when they’re not talking to potential franchisees. I bind bricks, I’ll take them to dinner. I build relationships with franchise brands, franchise concepts, and help them to grow their business.
Ressa 13:11
So the commercial real estate, tenant rep in retail, tenant rep restaurant, retail, super competitive landscape, not a ton of firms, but everyone’s vying for, you know, a pot of people that’s finite. And, you know, you could argue, is there a ton of firms or not, depends on your relativity index, but tell me, you know, what is the key difference? What’s the differentiator for someone who’s so focused and represents franchisees versus non franchisees and why you’ve been able to snowball that?
Is it just because people just don’t want to get into that lane? Because it’s tough, because it’s a new franchisee? They’re small business owners, or is there something that you guys, and you in particular, bring to the table, have an understanding, an execution that is hard for others to replicate?
Brewster 14:17
So I believe, up until February, when another colleague of mine here in Phoenix is going to get a designation. I am the only certified franchise executive in the country that holds a real estate license that I am aware of. So in the franchising space, there’s a designation called the CFE. That is like a Masters in Business for the franchising space. It’s a designation that proves through the International Franchise Association that you understand the franchise space and that you are well versed in that, in that vertical.
I have a CFE. I’ve had a CFE now for about six or seven years, why there is only one, and now as of February there will be two. I don’t know, to be honest with you, that’s kind of confusing to me. I don’t want everyone to, you know, start figuring that out, to be perfectly honest with you, because it’s a pretty good living for me.
But I will tell you, I do go to these events, I go to 15 events a year. And I will tell you, Chris, I don’t mind taking you to an event. It’s me, it’s not a lot of folks. There’s only a couple of brands that have this on their radar, it is surprising to me. And I think it’s a big miss for some of the big guys.
Ressa 16:00
So I’m super familiar with the conference, and super familiar with the there’s a bunch of conferences that go on for the franchise world. But I It doesn’t surprise me that you’re the only real estate guy in the room. And I’ll tell you why it doesn’t surprise me. So I went to, are you familiar with the NRF, the National Retail Federation?
Brewster 16:26
They did on January, yeah.
Ressa 16:30
I went to the January show, I was the only, it felt like the only real estate person in the room. And it was a great learning experience. But I will say this. And so I get a little bit. I think it’s amazing that you do it. From a, I guess a time value of money, I see a little bit because it’s a law. It’s the law. You go in that conferences, the long game, because I don’t know how many.
But maybe there are, maybe you’ll school me, how many times do you leave there with deals, where you leave and you like get this franchisee or this franchisor to sign up, because I don’t know if that’s the right venue for that.
Whereas our industry is very used to the ICSC, where there’s a lot of immediate gratification, you go to the event, it’s I says he does a tremendous job of setting this up to be a place where you’re going to leave with something tangible, a deal, a relationship about a deal, you know, the amount of times we leave, and people are going to tour properties that we own is high.
Whereas that’s not the type of event, because you’re essentially a dip a vendor, a new vendor at this event, it’s probably not going to be that immediate satisfaction that immediate gratification. It’s a long tail game. That’s my gut.
Brewster 18:02
No, that is absolutely correct. In fact, when I started to do this, I actually sat down with my wife because I was paying out of pocket in my own. For with my own money. I didn’t have a company that was going to fund this. And we committed in writing my I sign this contract and my wife signed this contract $30,000 a year for three full years, that we’re going to spend this money whether we had a return on investment or not.
And if I had not done that, after the first 12 months, I probably would have said there’s just no ROI here, it’s not going to work. Now, 15 years later, I have built a team of brokers around the country, we’re driving millions of dollars of revenue. We’re looking to replicate what StarBack created on the retail side which hasn’t ever been created, a true tenant focused retail firm, and that is something that’s never happened.
Ressa 19:16
15 years ago, you spent 30 grand a year for three years to go to this conference. I think it’s really educational. And I love that, it’s really educational because everyone’s heard, you got to spend 1% or 3% of your income on educating yourself, whatever it might be invest in yourself at that time.
Brewster 19:37
$18,000.
Ressa 19:40
$18,000, what was, that was your income?
Brewster 19:42
That’s what I made that year. The second year I made $22,000
Ressa 19:48
And you were spending $30,000?
Brewster 19:51
Each year. My third year I did better. I made more than $30 my third year, and I make significantly more than 30 now. But it took, it was a commitment that I had to, have my wife, and me and I had kids who were young kids. I mean, I’m 56 now. So I was 40 years old, I had kids that were, you know, high school and junior high school. And it was an investment. It was, I was starting a business, and I was investing money into a business. And it was a scary experience. But yeah, I made $18,000 that I paid taxes on, in my first year in real estate, and spent $30.
Ressa 20:44
On educating yourself
Brewster 20:47
On building relationships in the business. And again, we’re, you’re saying one show, it’s much more than one show. There’s there. So like I just got back two weeks ago, from the National Restaurant finance show, and talk to probably 12 Different brands that I will probably work with four of those. One of them is big chicken, this shacks brand, that I’ve got a good relationship with those guys.
And I mean, those some of these brands, California Pizza, kitchen is not growing anymore. Through corporate storage, they’re going to be franchising. And between you and me, they don’t have much of an idea of how to grow and franchise. I can certainly help them with that.
Ressa 21:42
For sure. Yeah, we could end right here, you know, spent 30,000 investing in yourself and in your business made 18,000 and kept going. That’s a story in itself tie. By the way, you went to the restaurant, Finance Conference, what’s the what? Outside of interest rates are very high? What was the what was the talk of the town?
Brewster 22:08
Franchising, franchising, franchising, this, things are falling into place for people like me.
Ressa 22:13
So step back from that, you’re at the restaurant Finance Conference. And that’s not what I would think was out there. But the concept was, the talk of the tower was you got to start franchising. And so groups like California Pizza Kitchen, who haven’t had franchising, they’ve got, I don’t know, 200 locations, 150 locations of corporate stores. Now they’re getting into franchising, because…
Brewster 22:38
So here’s the problem that you have in your business as a landlord, right now, a corporate entity, to build out a space is having to take money at what 7% 8% 9% interest. Sure, that is, that’s brutal, then they’re comparing that to the earnings that they get off of a basically free money three years ago. And they’re trying to compare that. So corporate growth has really slowed from what I’m seeing, and I think probably as a landlord, from what you’re seeing, you’re probably signing many less corporate leases than you were four years ago.
Ressa 23:22
Every year, I would. So that hasn’t translated yet because I think there’s something else going on, which is I understand the point and the premise, which is, there’s just this lack of space. And so there’s a lack of space, and there’s still significant demand and where I play in the value retail space. They’re, they’re doing well. And so they are growing. That said, I, the way I would characterize I wouldn’t say I see a slowdown in the corporate, I see an explosion in franchise.
Brewster 23:59
Okay. And I think that the reason you’re going to see that is that when you are laid off when you have any economic downturn, like 2008 2009 2010, these are some of the best years that franchising has ever seen. Because a person is going to take their package from Twitter or X, whatever the case may be, and they’re going to want to do their own thing.
And so they’re going to go out to Wild Birds Unlimited and buy a bird seed store because they want to be their own boss. And they’ve got they’ve already worked for the man. They’ve beat their head against that corporate wall, and now they want to do their own thing.
And when you go out and you put $50,000 on the line, and you buy that franchise you have to open the corporate entity does not have to open any more stores. When you buy a franchise from two For many brand new, you know, Moe’s Southwest grill, you’ve given them $50,000. If you don’t open that $50,000 goes away. You have to open a store. Corporate does not have to open a store. So it’s a different mentality to the person signing that lease. Sure.
Ressa 25:23
Okay, I could talk to you about this for days. And Ty, I think after this, you and I are gonna catch up more.
Brewster 25:29
And I’m happy to I could talk about this probably longer than you will have to have you out for a son’s game. Maybe we’ll talk to you the whole game.
Ressa 25:39
Don’t tempt me. I would love to go see your son’s game, too.
Brewster 25:42
I’ll throw.
Ressa 25:44
I’m writing this down. I’m telling Danielle. I’m telling her after. I told me he’s taking me her son’s game.
Brewster 25:50
I’ve taken you to a son’s game. I’ve got control the four C’s, we in fact, I have three daughters. So hashtag girl dad. Shout out to all the girl dads out there. I have a daughter. Very good. I love it. Thank you. My youngest is 26. She’s going to strangle me if I get that wrong. I’m pretty sure that’s right. And she’s about to have my third granddaughter. Wow. So very excited about that.
But about eight years ago, we moved downtown so that my wife and I who are empty nesters can walk to the son’s games and walk to the Diamondbacks games. So I just got done watching three World Series games that didn’t turn out awesomely. But I am. It was amazing to go and watch World Series game in person. I did not think I would ever be able to say I could do that. But I’m one of maybe 3500 season ticket holders of that type of class, which is not the most well attended team in the league. Well,
Ressa 26:59
I am, I’m gonna take you up on that son’s game.
Brewster 27:03
Okay, let’s do it.
Ressa 27:04
Let’s go to the last part of the show. I want you to tell a story. And you’re going to take me to Utah, about a store that opened called Seven Brothers Burgers. Take me away tell me where we’re going and what’s going on here. Why is this interesting?
Brewster 27:18
All right. So this is a long story a little bit. So as far as the amount of time so my daughter’s we took them on vacation to Hawaii. We were out on the North Shore. I love the waves. And my daughter went to church on Sunday with some friends who were living out in Hawaii and they said you’ve got to check out this hamburger place is phenomenal. So best hamburger place in the world.
And my daughter came home from church and told me we got to see that I said that’s the ridiculous thing. There’s no good food in Hawaii. It’s all horrible. You know, it’s all this food truck stuff. Anyway said no, no, no, we gotta go. So on Monday, we go to this place called Seven Brothers Burgers in La Jolla. It is right on the north shore in a little college town. And I had a hard time finding it. I did not think it was just a little 1100 square foot space. In this little it wasn’t a food line.
It was like a food. It was like a little grocery store. And very hard to find. We go in and eat best hamburger I’ve ever had. They’ve got this paniolo cowboy burger. That is as big as my head. I was shocked. We went to eat there every day thereafter for the whole vacation for a week. It was phenomenal.
Ressa 28:48
So what was that? Why did pollutants just show up on the sky?
Brewster 28:52
No, no, that was phenomenal. It was pretty cool. So if that happens every time I talked about the paniolo cowboy burger. There we go. I love it. That’s amazing. I love this. This is very good. So so I thought this is amazing. So as a real estate guy as a franchise guy, my first thought is, I gotta leave my business card.
So the last day in Hawaii, I leave my business card. And I leave it with a 19 year old kid who’s a college student and say, hey, if if you guys ever wanted to come to the States, this would be great. I would love to have you. Now they’re just messing with me.
Ressa 29:34
That’s pretty good. Somebody’s messing with us right now. This I love.
Brewster 29:38
Hey, this is awesome. I would love to have you give me a call and I can help you. I’m a real estate guy. I’d love to have you come out and I can help you to franchise and do the whole thing. I get a call about three months later from a guy who said you left your business card at my family’s brand. He is one of the Seven Brothers, and he wants to open a store in Utah. I said, that’s amazing.
So we started to search help them to find a location we opened one for him and his brother, one, two of the seven brothers. And so we now have a location to Seven Brothers Burgers in Provo, Utah, as well as one that’s over in Saratoga Springs, Utah. From that little vacation that we took after my daughter got home from a trip to Chile that she took and will amazing.
Ressa 30:45
That’s, that’s love the story. I mean, the fact that you left your car on vacation, your mind would always work and it led to something. Karma. That’s a great thing. The how many locations do they have now?
Brewster 30:59
I think we’re up to 10 locations. So we’ve got five along the North Shore and Arizona location, and then four locations in Utah.
Ressa 31:13
Are they are they going to franchise?
Brewster 31:16
They are franchising? Yes, yes. So I actually flew out a friend of mine to Hawaii that wanted to help them the franchise, that’s another, that’s a service thing. One of the things that we do at Locate AI is we try to, before we’re going to ask somebody to work with us. We tried to serve them three times.
So I actually took somebody out to Hawaii to provide them an act of service. They wanted to work with a brand to help somebody to grow and build into franchising. So I took a gentleman by the name of Eddie Gosha to Hawaii so that he could help them to figure out how to franchise, so now they’re franchising with Eddie and his team.
Ressa 32:10
Got it? Amazing. Good for you.
Brewster 32:12
If you want to do a hamburger place, Seven Brothers. It’s phenomenal. They’re open all over the East Coast. They would do. They do very well.
Ressa 32:22
You know, we just bought a center in Arizona, by the way.
Brewster 32:29
Prescott, oh, Prescott. My daughter lives in Prescott. Shout out to Morgan. She’s Swifty.
Ressa 32:38
Okay, go to the Trader Joe’s center.
Brewster 32:41
So, very good. I like that. We could we could certainly put some brands up in there.
Ressa 32:47
Okay, there you go. All right. Ty, I’m gonna bring us to the end of the show. I got three questions for you. Ready?
Brewster 32:52
Rapid fire. Let’s do it. All right.
Ressa 32:54
What extinct retailer do you wish would come back from the dead?
Brewster 32:58
Burger Chef and Jeff. I loved them as a kid. We would go there as kids in the Midwest. It was phenomenal.
Ressa 33:06
Excellent. Never heard that one before. Question. Have you heard of them? Oh, no, no,
Ressa 33:09
I heard. I know them. I know that toy. I know the brand. No one’s ever said it as a brand on the show. Yeah. Loved it. Question two. What’s the last item over $20 you bought in a store?
Brewster 33:24
A secondary monitor. I gave mine to a client because he needed one. So I had to buy a new one.
Ressa 33:32
Got it. Last question. Question three. If you and I were shopping at Target and I lost you, what aisle would I find you in?
Brewster 33:40
I’m a sports guy. I’m going to be in the TV aisle. I do that all the time. My wife will find me in the TV aisle. So I’m just watching this sporting event. So whatever. I could watch 12 year old’s play baseball. Just all day every day. I’m totally addicted.
Ressa 33:59
Your Cardinals fan to
Brewster 34:01
No, no, no. I mean, yeah. Okay. Yeah. I mean, as much as you can be. I mean, they’re It’s tough. It’s tough after the third or fourth game, but yeah.
Ressa 34:13
Where are you from originally?
Brewster 34:14
So I’m originally from the northwest, Portland, Oregon. So footballs never been my jam. Got it. More of a basketball and baseball, baseball guy.
Ressa 34:28
So are you trapped? Are you traveling just fine?
Brewster 34:30
I like the trailblazers back when they were they drafted a movie back in the day. But Sam Buoy. I remember watching him as a kid. I would go up courtside. He had the same size head that I had. And I was like four foot two. It was amazing how small his head was for a guy who was seven foot two. It was amazing. I go up there, he was, yeah, those are the good old days.
Ressa 34:59
You’re too much. All right, Ty, we’re gonna end this. I’m gonna set up a call with you. You’re fascinating. I’m gonna set up a call with you after, this is great. Thank you so much.
Brewster 35:08
You’re gonna be out in New York. I’d love to see you at an ICSC.
Ressa 35:14
Let’s make it happen. I’m there. I’ll make it happen. I’ll talk to you. Thanks.
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