083 FIFM – Interview with Paul Tran: Consulting Franchises Into Great Systems

Paul Tran Podcast Interview

In this podcast, you’ll get to hear from one of the best sales and franchise consultants in the world, Paul Tran.  Paul has been instrumental in building a tremendous number of fast-casual restaurant brands from 1 or 2 mom and pop stores into multi-national names.

Paul shares some of his thoughts and secrets to creating scalable businesses and how you can change your mindset to prepare from growth and scalability.

This is an episode you won’t want to miss.

If you want to grow a truly scalable and massive business by using a Virtual Systems Architect, head on over to www.freedominfiveminutes.com and sign up for your Free Business Process Scorecard and Masterclass.

 

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Automated Transcript Below:

 

Dean Soto 0:00
Hey, this is Dean Soto with www.freedominfiveminutes.com and we’re here again with another freedom in five minutes podcast episode. Today’s topic is this you can consult franchises into creating great systems that and more coming up. Alright, so welcome to the freedom in five minutes podcast. My name is Dean Soto which I’ve already introduced, but I am super excited today to have on the show. A longtime friend and one of my business mentors someone who helped me in my in two journeys one becoming an entrepreneur and to getting some pretty amazing systems experience under my belt and I probably would not be

be where I am today. I are in fact I know I wouldn’t be where I am today right now if it wasn’t for this particular person. So this person is named Paul Tran. He is one of the I’m not gonna say one of the he is the best salesman I have ever met by far my mentor and is extremely extremely good. In the in the in the restaurant fast casual restaurant.

Kind of systemized and franchising area with with, he does a lot of consulting and all this other stuff, which I’ll let him talk about in just a little bit. But Paul, thank you so much for coming on the show. It’s so nice to have you my friend.

Paul Tran 1:44
It’s a it’s my absolute pleasure. And again, I feel horrible because you’ve you’ve been telling me to get on a podcast for years, even before like if anybody knew what a podcast was. So you’re definitely a pioneer and I I’m sorry, I was a little bit

insecure about, you know, having my live voice being publicized. But I realized later that,

you know, after you’ve been pushing me and pushing me, I realized, you know, I want to be able to add impact and value to the world and what better way than to do it with a friend and to do it with your audience. Thanks, man. I love it. I’m not giving up on me. I never give up on you. You never give up on me man.

Dean Soto 2:24
Cool. So, so I kind of gave a little bit of a little bit of Hors d’oeuvres a little bit of an introduction of of, of who you are, but kind of give from from the very get go of Gosh, even when we met before we met and so on and to where you are now kind of give an introduction of who you are and what you’ve what you’ve done over. I would just the past few years.

Paul Tran 2:48
Sure. Um, I have a I’ve been in the restaurant and franchise industry for about 12 years. It all started with

a crazy idea to start a restaurant with no cooking experience, you know, no money, I guess nothing that you would normally come in prepared fully prepared for. And I guess there’s something cool about being naive about the business. Because when you don’t know it can’t be done, then you just push through conventional, like, Oh, you can’t do that. But I mean, we can definitely get into more detail if you’d like. But pretty much fast forward. A couple of years later, I sold my business, I sold my restaurant that I ran for three years, I got an offer to be bought out for multiple times what we what we put into it, which is great. And I also worked for the largest franchise development company in the world. And that’s Fran smart, they’re based in DC and Irvine, which is kind of during the time where you and I met, while I was helping a portfolio of restaurant chains grow from, you know, mirror one unit to unit or mom and pop, you know, a couple units, couple corporate stores, and, you know, consulting and connecting these brands with systems and manuals and the right franchisees and a lot of other things that help, you know, change the mindset and the composition of a mom and pop shop to a global, globally recognized brand. And during that time, you know, of course, I was heavily in the networking circles. I also, you know, cared a lot about, you know, doing nonprofit work. And that was during the time where, you know, Twitter was just, you know, super on fire, and everybody’s using it to have a conversation connect with people that they otherwise wouldn’t have, and initiatives get, you know, initiatives are able to be carried out with the group of people without barriers. And you and I, we we just, I don’t know how we found each other to be on. I just just think through mutual, mutual Twitter, friends, but I think we all just share this idea about hey, you know, there’s a lot of people who are networking going to these networking events, trying to build their own businesses, why not add an element of, you know, giving back to people, there are a lot of like nonprofit initiatives that don’t get enough of a voice, you know, the American Heart Association and all these other massively budgeted nonprofits get a lot of love, and they get a lot of TV time. What about these small organizations that make just as much impact if not more, like direct impact? And how come they don’t get any voice? So we just partnered up with a lot of nonprofit organizations and locally, for example, I think we did one for a share ourselves where we, we had we had, you know, people find help homeless people get into a temporary, you know, hotel room situation until they figure out what they can do to, to sustainably get them back on their feet. You know, you and I, we we planned along with all of our other friends, you know, Neil and Debbie and, and all that with a we we just held networking events where people would donate money and also be able to promote their business at the same time, like do do good by by doing well, by doing good, I guess. So that’s pretty much how we met.

Dean Soto 6:22
It was so cool. It was it was awesome. But that’s to remember connect to see when we did when we had night show from from American gladiators there.

Paul Tran 6:31
Oh, yeah.

Unknown Speaker 6:34
I was like, yeah.

Paul Tran 6:37
That’s crazy.

Dean Soto 6:38
Yeah. That was that was powerful. Man, that was powerful. But yeah, like, so yeah, we, we definitely you one of the things that you you were so open with with social media, and we ended up connecting and everything like that, through that. And then ultimately, I, at the time, started actually working with you. Were you were mentoring me on the the franchise side of franchise development and how how franchises worked anyway, and all this other stuff, when it came to, to building out all of these these exclusive territory type franchises. And so with like, with that experience, what has what have you seen, I’m just going to kind of jump right into kind of success with because you’ve seen with all the development, you’ve seen what’s worked and what’s not, with, with restaurant businesses, which has, they have extremely tight margins, extremely tight margins. And so when it translates to other businesses, it is actually easier for a lot of other businesses because they don’t have as tight margins. So what has been the, like some of the big success factors in growing a franchise and actually having someone be successful in a business like that?

Paul Tran 7:58
Sure, sure. Now make this joke where every time I hear a friend, they have a different business, and they share what they do. And they’re also really generous and sharing what their margins are, oh, man, I’m in the wrong business for 12 years. But I’m just kidding. I think that I think I’m in the business because, of course, I love food. And another thing is like, oh, razor thin margins, Challenge accepted.

But I think as far as keys to success with restaurants is

I think the first thing is you you

you need to know that. You know,

whereas a lot of companies can can be wasteful or can give a lot of slack to costs here and there. You do need to know that, like, it’s a penny, it’s a pennies business. And you need to be able to be meticulous and vigilant about cutting costs in everywhere. That’s, that’s appropriate. And because there’s 1000 things that you can cut costs on in order to make the margins and you also need to rely on not just cutting costs, but more importantly, generating the revenue. Because McDonald’s, you know, sometimes you wonder why, how could they sell $1 cheeseburgers in a market, that’s, you know, the, the inflation and all the other costs of doing business are growing, they’re not going down. And it’s all about, it’s all about volume, you need to get a lot of people through the door. And so it’s a balance of making sure you cut costs, but also making sure that you know, you’re constantly reaching out to the community, finding ways to get customers in the doors. And I mean, that’s pretty much it in a nutshell. And also, you know, it’s not just that, but also cutting costs where it matters and being a little bit more not reckless, but being a little more

loose on certain cost. For example.

If you really think if you really think that customers, think about this customers who come through your door, even though you think they’re paying just $10 for For example, one of my restaurants to Hello guys, they they’re paying just $10 for a platter. Think about this, like there’s, we have customers that come to three times a week. And that’s, you know, that’s over 10 times a month. Yeah. And I did the math and over time, like these customers are worth like $25,000. So, so if you know, you don’t want to be cheap with your loyal repeat customers, like if their order isn’t right. Or if you use our loyalty program where you find out that you have VIP customers like you can like treat them, you can take very good care of them. You can throw a little bit caution to the wind because they’re the ones that are going to sustain your business like what what is a $10 totter if you’re getting $25,000 in return? And so it’s the long game on that one. Yeah, Mark. They’re small,

Dean Soto 11:00
but it’s the long game. That’s cool. That’s that’s awesome to hear. Because, because yeah, that’s that. That’s interesting. I remember telling you, it was it was not too long ago, I was I was with Oliver he was he was consulting with somebody in Tustin, I went down. I was actually down in that area. I think I think I even saw you when I was when I was down there. But anyway, the I went to one of your competitors a different ice cream place

that that

had this franchisee who we literally were there for like 20 minutes, man just waiting for ice cream and there was like there was probably three people in there who had ordered and this franchisee was literally having the having the staff member that you know 18 year old kid measure out and way how many sprinkles they were putting in to the ice cream. And, and and no joke. It was it was where it was even a hair off of what it should be. They were taking it out putting it back in and taking it out. Put it back in. And I’m sitting there going You gotta be kidding me. Really, you’re literally going to lose a customer like I will never go back there ever over three sprinkles, because it’s it’s you know, one one milligram over what it should be.

Paul Tran 12:33
That’s Yeah, that’s like what’s what’s the cost to the customer experience when you do that? Right? Yeah. Well, I’m going to back up and say that that’s a You and I are going to talk offline about you going to my competitor. That’s a sore subject still, but I’m just getting better.

Dean Soto 12:50
But you so like that being said, with with you. So you have Hello guys is one of your brand brands that you that you’re a franchisee Have you what other brands do you also have?

Paul Tran 13:04
Yeah, so my partners and I, we we have 12 Hello guys stores, restaurants across Southern California, our I’ll continue to build more. We have most of our stores concentrated in LA County and or Orange County, and we’re going to be venturing into San Diego County this year. So that’s pretty exciting. I also own two college and ice cream stores. Which it’s funny because both these clients it’s a it’s a story of insider trading and double dipping. Because both these these brands that I’m a franchisee of I initially was their consultant, I helped turn them into a franchise first as a as a client consultant type basis. And then I turned back around and said, Hey, I actually want to actually want to be a part of this more than just a from a consulting standpoint. And so I built the team paid the franchise fees and open stores for them as well. So what money they paid me in terms of consulting, I turned it back to them royalties. And it’s been a good relationship. That was like you said, you basically go in there, you make sure that they’re successful. And then when they’re successful, you’re like,

Dean Soto 14:13
yeah, okay, now I’ll be a franchisee.

Paul Tran 14:17
Yeah, I knew all the Yeah, I I joke around and say that’s the legal insider trading.

Oh, that’s cool. So yeah,

Dean Soto 14:26
let’s talk. So about your consulting, then like, so what? Like, what are some of the things like so for example, like with that, I don’t want it to be about specific, because there’s probably like proprietary stuff, but what are some of the things you see as a consultant, that with with your brands right now that either lead to success, or that don’t lead to success that they You see?

Paul Tran 14:52
It question? A lot of so when I worked at France smart, when I worked there, and also now that I’m on my own, I noticed that in 100% of the time, my clients are, you know, brands who are small, who do like a mom and pop, and they’re not entirely sure how to get to the next level. You know, you and I probably have a really deep conversation about this on, you know, how is it that, you know, McDonald’s franchisees can open 20 stores, and I can’t even like, think about opening a second one. Yeah. And so I think a lot of it’s a mindset shift. And they need to, they need to learn to let go on a lot of core things, that a lot of things of the business that are, you don’t need to be doing them. And you also need to systematized a lot of things, you know, you can’t, you can’t possibly be doing payroll can’t do scheduling, you can’t do the hiring, you can’t do 1000 different things that a restaurant requires to do, because your head’s gonna spit. And yeah, of course, you can’t do opening a second store because you think you’re going to be doubling the workload. And so it’s all about a mindset shift where I’m the owner, I need to be the CEO of the business. What that means is that I need to build the corporate structure, I need to hire people that build a team, you can’t do this on your own. It’s like that concept of being, you know, penny wise and pound foolish, like spend a little bit of extra money to to build the team to put the systems in place. I had to be honest with you, like for my whole guys, chain of stores, like we built 1312 stores within a five year period. And there’s no way I could have done that if I had not raised capital with friends and family and people who believe in what we’re doing. Yeah, I, we couldn’t do that without hiring district managers, we hired people who are already ready to be district managers. So we hired them how to time we knew that we’re going to scale so we built the bandwidth to scale. And we already trained them to develop them to do a lot of the things that are critical to the business where it allows us to focus being on being more strategic. And all that costs quite a bit of money. But, you know, guess what, it’s it’s either one store, and either you can make 100% of one story, you can make a pretty nice, you can share the the equity and that the profits in order, you know, over 10 stores or 20. Stores? Yeah. So I think it’s just mainly the mindset show, I think a lot of the tools, I think there’s no, there’s no shortage of tools, systems, this stuff, but it’s all it’s all up to the business owner to change anything course.

Dean Soto 17:41
That’s that’s a, that’s a great, great, great point, is because

Paul Tran 17:47
there’s a matrix kind of thing, dude. Yeah,

Dean Soto 17:49
for sure. It’s funny, do you find that? Because it’s actually hard for me to even think the way that I used to think where is I was definitely on the, on the I want 100% of one business? Or one thing? You know, the, do you find that once you’ve taken the red pill of, of, Okay, well, I’m going I know there’s gonna be a dip in profit, or I know there’s going to be a dip in, in what I would see, but I’m building this the scale do you do? Do you see that as? Is it hard for you to even think the original way now where it’s just have one do you do you find yourself thinking more in scaling, since this is what you’ve been doing for a while now.

Paul Tran 18:34
Um, you know, it’s always easier to give advice versus take your own advice. So, um, you know, our business, you know, has its ups and downs. And, you know, it’s easy to get sucked back into, like, Oh, we should cut costs, like, in a big way, we need to cut this department, we need cut labor tremendously, you know, just because there’s business cycles in our restaurant business, for example, genuine to time, during wintertime, you know, after sorry, after the New Year’s people have new year’s resolutions, they want to eat healthier. They also, you know, blew all their money on Christmas. And our business is slow for the first couple months. And, you know, I’m human, and I have these knee jerk reactions. And it’s like, oh, man, we got to cut costs. And again, I might end up being guilty of that same dude that was measuring one millimeter, on and off during those times. So it’s, I get that way sometimes. But as each year goes by, and we continue to grow, it becomes less and less Oh, wow. Because it’s, you know, long term thinking is manifested in like, wow, this year, we have 13 stores this this year, we have that nice. And it’s because I didn’t I didn’t focus on the, on the, on those insignificant, unnecessary things. So yeah, I fall victim to it to it. So. But yeah,

Dean Soto 20:01
but yeah, that’s, that’s a very human human human response to that question. So with your consulting now, what what do you find yourself doing the most with your consulting? I think it’s so cool actually seeing you, you help brands to become really big? And what, what’s kind of been the focus with your consulting lately?

Paul Tran 20:28
Yeah, um, yeah, a lot of the consulting is still a lot of, you know, small restaurant chains who, who are interested in franchising, they’ve received some inquiries from customers saying that they want to franchise they just don’t know how to do it. You know, most of them are so buried in their work that they, you know, just for example, like stock trading or, or government compliance work, I mean, that’s a full time job, they just don’t have the capacity to do it. So there, they there, they’re making money, they are seeing a lot of success. They’re getting interest in inquiries for franchising. They don’t have any systems in place, and they’re just curious to know, you know, where they should start. And that’s, there’s no one size fits all strategy. And I think that’s why that’s where the value of my consulting comes in. And there’s also so much decentralized, like so much conflicting information on the internet. And there’s a different strategy for retail, there’s a different strategy for service franchises, and there’s a digitized for restaurants. And so all that stuff. I guess all that confusion makes me look a lot better as a consultant. But yeah, that’s the reason why they come to me. I mean, a lot of times, maybe they have done an amazing job with building a sexy brand. And they build a viral following, but now they don’t know how to turn this into growth. Yeah. Or they don’t they’ve they’ve gone through the

you know, they,

they they’re doing really well, they’re there. They have a lot of customers through the door, but they’re not making any money whatsoever. Yeah, yeah. Or, yeah, a lot of it is, you know, they’ve, they’ve been a franchise for a while, and they’ve kind of just been floating. not growing up, not not not failing, and they just need to get out of this. Maybe this invisible barrier that they’ve been in. So, so many different, so many different reasons why I’ve been consulting that’s it’s fun.

But yeah, that’s it’s all over the map.

Dean Soto 22:34
That is awesome.

It seems like it’s a different, it’s a different a different challenge, depending on who it is. And and each one has its own kind of solution to a lot of that, like what’s a? So with all of with all of that. What has what is kind of going to ask you that aha question. I always try and ask this, just to every person who’s on the freedom in five minutes podcast, what is what has been the single most whether it be for you, or for one of the people that you consult for the single biggest kind of five minute mindset shift or five minute thing, strategy tactic, whatever has brought the most results for you or for people who you’ve actually consulted for?

Paul Tran 23:34
That’s a loaded question. That’s a thought provoking question. For me, I think there’s a lot of aha moments, but you’re asking about like for clients

Dean Soto 23:44
can be for you or for clients, something that were where there was just something that that is really a paradigm shift for you or for your clients, that once it happens, it puts them them or it has put you on a trajectory to massive success.

Paul Tran 24:01
Sure. This is going to be a little bit self serving. But

I think the biggest thing has been

the introduction of virtual systems as architects. And I know, you know,

this is what you do, and this is what you specialize in. And I want this, I want the audience to know, this is completely as objective as unbiased as possible. But I think the game changer for me, and also the game changer for clients of mine, I think the biggest value is not my gift of gab or, or my ability to sell or anything, but it’s mainly like the advice that, you know, there is a better way to systematized your business. And there’s a much better way to get work done without the

the assume high costs of hiring good people to do. You know,

one of the biggest things that you’ve done in my life team was to introduce virtual, you know, back then virtual assistants, where I’ve had virtual assistants for probably five, six years now. And they’ve been able to make my company look a lot larger than it is, it’s been able to get a lot more done with numb and not let me be the bottleneck. It’s allowed me to enjoy my work a lot better to, like I can enjoy with actually helping clients and actually giving advice. And as far as paperwork and administrative work is concerned, the stuff I really hate, they kind of go away because I do have a virtual assistant that takes care of it. They take a lot of the stuff away so that I can just do the thing that I think is the most strategic valuable, valuable thing for myself and for for clients. And it’s funny, you and I, I felt like I’ve been keeping that a secret for five, six years. Okay, I was kind of like, I don’t want other people to know, like, how I get people, like, you know, how do you own so many restaurants and you do consulting and you travel, like, I kind of love it kind of stroke my ego that like, they think it’s all me. But that’s definitely the selfish, short sighted way of thinking, I think over the years, you and I just realized that, you know, we can’t be the only ones that, that that are that need this. And so you and I, we’ve done some some consulting gigs together, you’ve actually, you know, you’ve been generous and coming down to help with clients client work as well. And, you know, my aha moment was also another clients aha moment, right? Yeah. And we we consulted for some, some good friends and also a large chain that was growing very rapidly. But the pace of their growth, which you know, the name, we can’t disclose it, but at the pace that they were growing like they were, you know, multiply they’re their labor, you know, big time. And our time there our time, like just an hour, they’re not five minutes sorry.

Are, well, if they find me, the five minute decision

that we spent there, made them realize that there is a better way and you introduced helping them find virtual systems architects Yeah. And they love them so much, I believe they’re going to be increasing their virtual assistant,

Dean Soto 27:27
they actually just got another one. This week, they start. So so they were they’re extremely happy. And, man, they’re like, they’re, they’re using them for like the for hiring, they’re using them for a whole bunch of different things. They’re, they’re, they’re crazy when it when it comes to it, and they’ve, they’ve expanded a lot since since since we first even talked with them. And that expansion is just going to continue to grow. Because, you know, they’re not. The cool thing about them is they, they can rely on these these guys who who are a fraction of the cost, right? And, and they get everything documented. And so now they have this new guy come in, and guess who’s going to train the new guy, it’s going to be the virtual systems architect that was there before. So they don’t even have to do anything. You know, it’s it’s, it’s, that’s, that’s, yeah, it’s cool that you brought that up? Because obviously, it’s a little self serving over here, too.

Paul Tran 28:30
No, no, but but but you and I like I like the reason why I love you, man is because, you know, we’re selling, you know, we’re selling to help. Like we don’t, we wouldn’t, we wouldn’t promote anything that we wouldn’t believe in that we do ourselves. You know, for example, like, I was working with all guys and collagen ice cream, and I love this so much I sold myself on it. And these virtual systems architects have been so helpful to so many of our clients, that I mean, it’s it should be kept the secret, especially with minimum wages now in LA, like 13 $15. And that’s

Dean Soto 29:05
the base salary as base.

Paul Tran 29:08
And I did research like, if you do you all the costs of like lyst, the job interview, the time it takes training, developing, what if you lose that person, you had to do it again, all that stuff, you end up adding almost doubled the costs like for for someone who’s $15, like the cost of, of create a hiring training, developing is like making space for in your store and pay for HR, you have to pay paid? Like there’s so many things like as I say that, like, it’s, I’m sure business owners that are listening to your podcast, like I don’t want to hire any more people. Like, even if I’m growing. I don’t want to deal with the hassle. Yeah, but but hiring these people at a fraction, like you said, you don’t pay any, you know, you don’t you don’t pay any of that training, development stuff. In fact, they take over so much more than people think virtual assistants take care of like, for example, you said, Now you’ve been able to help my client, like hire people, interviews, manage all the stores,

Dean Soto 30:06
actual virtual systems architect is doing the interview, which is which is crazy to think of. But you know, they had that they had the system, they had the guy document how they wanted the scripts to be in, and how they wanted the systems to be and everything like that. And then boom, the guys doing it.

Paul Tran 30:24
It’s It’s crazy. Crazy. And also like my vert, my, my PSA, she she does my bookkeeping as well. And I just did it out of curiosity to quick search on bookkeepers, they’re like 15 to 20 bucks. And I don’t I don’t pay nearly that much. And she doesn’t just do that. But she does. She helps me with sending client contracts, she now she helps with my restaurants as well. She helps them with scheduling, hiring all the HR paperwork. And now she’s going to start helping me with reaching out to the community for marketing purposes. So like, it’s, it’s, it’s the work of like maybe five good people here in the US. You know, like, it’s, it’s incredible. I could talk about it for hours.

Dean Soto 31:13
And we’ll maybe we’ll have you back on and we’ll talk about doing with it. That’s awesome. Man. I love hearing. I love it here in it. So so how can people find out more about Paul and what you’re doing and and have you as a consultant? Because I would I would imagine that you would even consult outside of outside of restaurant franchises and stuff because you you have the systems experience, you have the growth and stuff like that experience. And so how can people find out more about you and what you’re doing and how to reach you?

Paul Tran 31:44
Oh, sure.

If you I think the platform that I use most is LinkedIn for business purposes. So if you look it up, it’s linkedin.com slash forward slash i n forward slash Paul teacher. And that probably the best way to connect with me on a on a business level. If you want to know just what’s going on in my life personally, and just for fun, I’m pretty active on Instagram as well. So if you look up at potty train on Instagram, that’s definitely the way to go to. And

Dean Soto 32:20
he’s always traveling, like if you want to see like some crazy stuff, that he’s always somewhere I’m like, I’ll go on Instagram, and I’ll see Oh, Paul’s in Alaska right now with the polar bear.

And I just saw him yesterday What the heck.

You definitely gotta go check them out. And, and yeah, he one of the best consultants that I that I know. And still is one of my mentors. So you are one of my mentors, man.

Paul Tran 32:49
Oh, thanks for it actually works both ways. I learned so much from you as well. And again, my aha moments actually because of us. So I appreciate you so much.

Dean Soto 33:00
Likewise, likewise. Cool. So thank you so much for being on the podcast. Guys. If you want to find out more about Paul, go and hit him up on LinkedIn. Go and hit him up at Instagram. So that is Paul T. Tran. So that’s that is his username on both of those Paul T. Tran. Not Paul Tran because that’s somebody else. Paul T. Tran. Go check him out. If you want your business to start growing and just getting just massively massively, just massively expand. Definitely hit him up. talk with him. He is absolutely amazing when it comes to growing a business especially with the branding and marketing and everything like that side of things as well. So go check that out. And as for now, we have reached the end of the podcast but does not mean that this is the last podcast. Oh, what’s up?

Paul Tran 33:55
Is it all?

Dean Soto 33:58
Yep, sorry. Sorry. disappoint. Yeah, you have to come back again. So that’ll be that’ll be a fun fun thing. We’ll talk more about the virtual systems architects and stuff. But until then, everybody thank you so much for listening to the freedom in five minutes podcast. My name is Dean Soto and we will check you out on the next freedom in five minutes podcast.

Check out this episode!