Josh Sevick: Patrick, thanks for having us on. We appreciate it. I didn’t start my career thinking that I would end up franchising. I didn’t think I’d end up in landscaping either. In 2013, I was working in mergers and acquisitions. The organization I worked for decided to buy a franchise company. I had the opportunity to take that brand and grow it. Then I became the CEO eventually, and we took that thing from 100 locations to about 800. I fell in love with just leading in this environment and connecting with those owners.

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“The opportunity in the landscaping industry is massive. We’re talking $100 billion industry in the U.S.”

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The Grounds Guys expanded from 100 to 800 locations around the world since 2013

JS: I fell in love with the opportunity and just the fact that there’s no ceiling. I was thrilled to get on board with Neighborly, our parent company. It is the premier services franchise organization in the world, the largest, you know, home services provider in the world, and also the premier franchising organization got on board with The Grounds Guys. I’ve been the president there since mid-2019 and just enjoying the rise.

P: You grow a business, say 800 units, and then you start a new job right away?

JS: It’s funny. I held both jobs for about a week, so I didn’t even get a day off. We don’t want to get rusty.

Achieving success as a landscaping franchisee depends on taking the first big step

P: And how about you, John?

John Dobelbower: My path was quite a bit different. I was a small business owner before entering into franchising and I had grown a pretty substantial revenue-generating business, but here’s the thing: I was working 90-hour weeks. Then I ended up hiring a manager. I kind of stepped back away from that business. And you know, one thing led to another. Finally, the business didn’t do as well as we would hoped.

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“I started thinking about what can I do to get out in front of this because I truly believe in entrepreneurship. I believe in the lifestyle that it provides but I don’t want to have people go through the same struggles that I was going through.”

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JD: … And at that point, it was a God thing. One of the people at Neighborly reached out to me and said, “Hey, how do you feel about franchising” So at that point, it clicked for me. I ended up joining and the rest is history. I love what I do.

The predictability of landscaping franchises makes them a safe business

P: That’s great. I can relate to that as my brother and I have started a couple of businesses. And what I tell people with franchising, your road to breakeven and profitability is much easier to predict. Franchising’s nice. You have predictability. And you can talk to other franchisees that did it before you, know how long did it take you to break even. That’s what I see from my end. I don’t know if you guys see this similar thing.

JS: I think a lot of people when they think about leaping, it takes a long time. It is difficult to make the change being a manager, an executive, whatever it is. And have the comfort of predictability…

P: Nice…

JS: We help people out of the gutters. I agree with that though.

P: Yeah. I mean to go from like working at a big corporation where maybe you’re a middle manager and you have that assistant to then going to 1 or 2 people, it’s a huge, huge jump.

Efficient franchise system for profitable businesses

JS: It is. I’ve run three different franchise systems, and they’ve all been very similar. We help with the systems, the processes, and we also make sure that their owners understand that it’s a different level of management sometimes, when you’re getting into a new business. And that’s where we give a little bit of a jump start.

P: And before we go into The Grounds Guys brand, Josh, you had mentioned the $100 billion industry on the landscaping side. Could you just break that down a bit as well as maybe talk about the growth?

JS: Yeah. That’s pretty stunning to me. And I’ll give you a statistic that’s even more stunning than the $100 billion in revenue in the U.S. That’s the U.S. alone. We operate in Canada as well so we tack on another $10 billion there. But the big, stunning statistic is that it is the most fragmented industry that I’ve ever seen, and so out of that $100 billion, there isn’t a player that’s more than 2% of that.

P: ¡Oh, wow!

JS: And in addition to that, you’ve got 500,000 businesses. There’s a very large bifurcation between your top couple companies, and then you’ve got just a ton of organizations, not highly structured, with good people, working hard, doing good things, and making a living, but you just don’t have much in between those two. You got a billion-dollar company, and then you’ve got a guy doing $100,000 somewhere. There’s a very unique opportunity in this space.

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“Just look at some of the industry stats and you can see that the opportunity is massive. The people may be getting a 4% to 5.5% net profit margin…”

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Long-term business relationships ensure profits

Patrick: Yeah. It’s tight. Do these big companies need to be doing a lot of landscaping routes?

Josh Sevick: That’s right. We’re going after a $100 billion industry. We’ve got some very specific, customers and opportunities that we go after. That’s how we build outsized margins and long-term relationships that we see as the golden goose.

P: Is the opportunity more on the residential or commercial?

JS: Well, Patrick, there’s one foundational thought process that sets up how we think about the industry. The industry would look at itself with two major characteristics. They would say, “Are you residential or commercial? And are you a niche service?” Think TruGreen. They do their job well. They come to fertilize and do weed control. We look at it a little bit differently. Don’t think residential or commercial. We think on those two lines. And we want the people who have a real need for a special outdoor space. If we compare those things together, we get high margins, long-term relationships. And we’re passionate about this specific customer.

P: The local decision-maker, they’re going to be able to sign up much faster than if it goes through a bureaucratic process. And I would imagine the price, it’s just a lot more elastic where if someone wants something done and in a great way, they’ll pay a lot of money for that.

JS: No, that’s exactly right. Our industry works off of large commercial contracts and they don’t ever even speak to the decision-maker. They may be three or four relationships away from the decision-maker and it becomes a price game.

P: Which is… to in…

JS: Y may have persistence in that relationship, but look at what happened to the world just this year. Year over year inflation was 6%. If you’re locked into a five-year relationship and you can’t even get to the decision-maker, do you want that business? We want a local decision-maker, a hand we can shake. And we want someone passionate about that outdoor space.

Residential and commercial landscaping service

P: It´s probably the owner doing business with the owner, the franchise owner and it’s either the key executive or the owner that he’s selling to and servicing, right?

JS: We would say on the commercial side, we want that local owner. Then on the residential side, we have two very specific personas that we go after. We call them the Fredricks and the Edwards. We know the houses they live in the communities, the cars they drive, the media they consume, how they like to be communicated with, and those are the people that we go after and target.

P: That’s great. If Someone that’s just starting a landscaping business, it would take them probably five years to start creating marketing personas of who they are going to go target if they even get that far.

Josh Sevick: We like to think so. I was asked to do a video a couple of weeks ago. It was kind of off the cuff and it kind of turned into a little marketing video. And what I was saying was, you know, when you look at what we bring to the table for a new owner, it would take a company that’s $100 million in revenue to get the kind of deals that we offer our guys right out of the gate. We’ve got industry-leading software platforms, landscape design, staff management. You just go across the border and folks are stepping into this opportunity right out of the gate. We’re pretty proud of what we’re doing here.

The Grounds Guys: Customized Business

Patrick: Yeah. John, what is the ideal franchisee? What does that person look like? Who’s just killing it with The Grounds Guys franchise?

John Dobelbower: I wouldn’t say that it’s the guy that knows everything that there is to know about landscaping, the guy that knows how to put stripes on the lawn or lay a paver patio deck. Listen, at the end of the day, this is an executive-level ownership model. What we look for and target are people that, number one, they’ve had success in the past, a proven track record of success, whether that’s in a corporate role, whether that’s in past business ownership, whatever that looks like for them…