Right now I am hypersensitive and I know you love using AI and I and I don't blame you. I think it is a remarkable tool. However, it is going to be the single greatest disruptor of a lot of businesses like accounting, like legal debt. Absolutely. All these folks hiring all these third world country call centers. All these folks are done. They just don't know yet you're listening to carry let's is financial survival network where you get valuable information you just can't find anywhere else to thrive in today's trying times you need the financial survival network now more than ever go to financial survival network dot com and get your free newsletter and gift financial survival network now more than ever. And welcome you are listening to and watching the financial survival network. I'm your host Kerry Lutz. Well, if you thought about you're tired of working for a corporation, you want to go go out and do it on your own. Then you want to hear from my next guest. His name is Cliff Nunnenmacher. Hope I got that right, Cliff. No, no, no, no, no, no, no. Hey, that's good. Usually I asked first, but I forgot because we were so engrossed in what you were doing. So you had a career basically working for Morgan Stanley and investments. And something happened in 2003. And you just said, no, Moss, tell us, tell us about your journey. So that I appreciate it. And thank you for having me on the show. I appreciate it. Like listening. So going back, I've been an entrepreneur most of my life. I was I've been an entrepreneur at a very young age by mainly small businesses, things that I've created, whether it be food delivery or water sports, parasol boats, all that type of stuff. And then I was making money at a young age and I bought a satellite trading system. And I started trading stocks. I fell in love with the concept, took my portfolio to Wall Street and got jobs from all member firms. And I ended up taking a position with at the time it was Solomon, Solomon Smith Barney, as you know, is now Logan Stanley. So I was with the team. We were managing back in the Asian contagion. I know you're a various dude with financial markets. So I'm I'm going back a while. Y2K, Asia, get Asian. I was manager on 250 million. We I was with a group. It was called comprehensive wealth management. And I had one of those bad boss moments. And I say, you know, and I really always wanted to go back out on my own. I love financial services. Don't get me wrong. I love it. But I realized that I think I might want to go back out on my own had a bad boss moment. He made a silly decision, in my opinion. I asked for a printer. This is not a big deal. I asked for a printer to be on my side of the building. There's about 50 brokers. We were all sharing one printer, one Lexmark network printer who's absurd. Yeah, sorry about that. Yeah, the problem. So yeah, go ahead. Do you need to tune something? No, no, that's okay. Go ahead. I'll just mic a note here. We'll edit accordingly. Don't worry about it. Sorry. No problem. Fun. So we had this one printer networked with 50 brokers. Every time I'd walk across the building, get my stuff. It was gone. So I asked for a print and said, if you want one, get one yourself. So I did. The printer was $250. I figured out how to refill and remanufacture a used empty toner cartridge. And I actually started looking into it and I found a company in Australia that reverse engineered the toner, the ink, cyanmagenta, yellow, right? All of them. And the chips, even the secret handshake chips at chip resetters. And I bought, I'm like, you know what, I'm going to buy this company from Australia. And I'm going to scale it in the entire state of New York and Connecticut. And that's what I did. I ended up leaving financial services. That was my entrance into franchising. I scaled 36 units, sold it, moved to Florida with my, my wife, Nicole. And my business partner and I, Justin came down here. And we started buying other small businesses. And we, we mainly bought failure. We looked for blood in the street. Like Warren Buffett says, if you're not going to kick them when they're down, when do you kick them? Right? So we ended up looking for failure. We paid a fail business, let's say 10 cents on a dollar, immediately implement the franchise methodology, turn it around profitability and then sell it for a nosebleed multiple and do it again and again and again. And we did it. And obviously generated millions of dollars in profits. And we created a consulting company from that came this revelation that most people, you know this better than anyone. Most people lack investment discipline. They have no, no restricted hearings to anything. Yeah. They have no real due diligence process. They are highly emotional, they're irrational, illogical. And they end up investing in things they know nothing about when it goes down, they sell it and panic and lose money. They never viewed as a, as a sale and buy more. If you think about the average investor and the way they behave and why most people are not wealthy, that attitude is in small business. And we basically found opportunities by buying those family businesses and then growing them and selling them. You still buying small businesses now? At this point now, we invest in the franchise or so we make investments in the franchise concept. We try and find brands that are in that embryonic phase where we could get a lot of value or a significant percentage of ownership in the brand. We'll do that. But our core competency is our franchise consulting company called Fronosity. And we help investors navigate this very daunting process and help them identify what what should I buy? What what franchise should I purchase? What should I invest in? What should I be doing in this next phase of my life? Most people just hate corporate America. I've I've been doing this 20 years. I've never heard more hatred for corporate America than I do today. And I think vaccine mandates and just culture and DEI and all this, I'll call it horseshit. You could edit it if you want. I thank you. We're a family show, but I just cursed for the second time in 14 years on my prior interviews. So don't worry about it. All right. I just think it's nonsense. It's absolute nonsense. Thankfully, it's dying, which it should. I I I recoin DEI is death to every industry. It's the kiss of death. And you're starting to see it now. So thankfully that's starting to fall apart. But I think a lot of people just tired of it. That's I thought DEI stood for didn't earn it. Didn't I? That's my fave too. I love that one. Yeah, they did earn it. It's yeah. It's just based on nonsense. There's really no metric. Yeah, it's not a merit system. Well, you know, one thing though, I always like to see a DEI pilot when I got on the airplane, you know, because it just makes me feel good about my country and myself, right? It's right. I always look in the cockpit. It's so true. That's the one area that I want to know. It's like it's like this guy asked me years ago back when I was in financial service, he goes, does it really you talk about expense ratios, 1%, 2%, does it really matter? And I said, I have two parachutes in my hands. One of them has a 97% success rate. And the other one has a 98% success rate, which one are you going with? It's only 1%. He's like 98, of course, of course, you're at why would anyone shoot exactly? Why would anyone choose a parachute that has less reliability than the other one? So it's like percentages do matter, right? These things do matter this whole who's up in the cockpit. Where did you graduate? How many flight hours? It all matters. Oh, yeah. Yeah, it's so true. And it seems it should be self evident, but not the purpose of us talking together, but really it fits in well, right? It is very relevant that you got to have the right training. And because you have to acknowledge your failings, you know, you don't have the discipline that you should, because you weren't trained to have it. So you better get it, right? That's right. Look, it's Sully. Look at this guy that land. I mean, come on, this guy is like a rock star landing this plane in the Hudson. It was just remarkable what he's done. I'm afraid that the lion's share of pilots could not achieve that water landing. I'm sorry, I don't I don't buy it. Yeah, I agree with you. I don't buy it, Carrie. I have a friend who's a pilot for a major airline for 45 years. And, you know, they just don't make them like that anymore. Although, you know, the art evolves in business too, right? You want the Sully to teach you what to do. That's right. You don't want the guy who basically Sully fired. That's right. Right. I want someone with battle scars. I like older doctors. I like to take all that stuff. I like, yeah, I like experience. And this is why people are trying to erase our past so they can control our future. I don't go for it. I want to learn from that. Yeah, it is. I think I was over now, but I'm with you. Yeah. Yeah. You know, that old joke. What do you call the guy who graduated last in his class in medical school? The best doctor doctor. Right. So true. So, you know, like you want to go to the best. So when you're looking at a franchise, okay, you get in on them early. What do you look for? And what should a franchisee, someone who's looking to buy a franchise? What should you look for? Yeah, that's it. That's great. You know, most people don't ask those specific questions. When I'm looking at a brand, I'm starting with proof of concept. How many locations do you have to you have proven nothing, even though that location might be doing a million. And let's say, you know, some area of California with average household income of 250, you haven't proven that that concept can work well in Austin, Texas or Tampa, Florida. Yeah. So I really don't have proof of concept with a small number of units operating in a very specific geographic market. I then look at the founders that look at the executive team. I look at their ability to support the franchisees. I look at the FDD, the franchise disclosure document. I'm looking for background lawsuits, bankruptcies. I'm looking for failure rate. I'm looking for the growth of the model. And I'm looking at the financials of the franchise or which must be audited and included as an exhibit in the FDD every single year that they make their offering. So I'm looking at a multitude of things in franchising, support, support, support, proof of concept, the ability to scale it in any market is important to me. But then I have to match it up with the investor. Who's the investor? The investor is high net worth. We'll define that. Let's just say they have a net worth of a million. And they're an engineer. I don't want to put them in the sales organization unless they have more capital to hire the skill sets they don't have, which is a big issue in franchising. People get attracted to businesses they don't belong in. And that's how I created wealth in the beginning, buying the failure. You didn't belong here. That's how we created frontocity. They bought businesses they never belonged in to begin with. And because they lacked discipline, they weren't really matching themselves with the right brand or culture. And they didn't execute properly. So if I'm looking for a business now, what are the what are the best areas do you think franchises? Right now I am hypersensitive. And I know you love using AI. And I don't blame you. I think it is a remarkable tool. However, it is going to be the single greatest disruptor of a lot of businesses like accounting, like legal debt. Absolutely. All these folks hiring all these third world country call centers. All these folks are done. They just don't know it yet. So I'm very gone. Really? Oh, they're going to be dead. They're not gone yet. But it'll be one of the first to go. It's the systems, the AI systems are so intuitive. Now they can route calls and they could do basic tech support, basic answering. I mean, look, look, what you and I are able to do right now on the fly. You could ask me nearly any question. I'll have an answer for you pretty quickly. It's remarkable. So when you ask me, yeah, when you ask me that question, I'm looking for businesses that are basically AI proof and they're Amazon proof. They're tried and true. And the services are performed locally. So I love all things home services, non brick and mortar home service brands, because because I believe that people who can use their hands and tools are going to be the most protected asset class in a world of AI. I believe that those but I absolutely, I do believe that I think that your average plumber is going to have the income of today's attorney. If you're not if you're a trial attorney, you'll be okay. Because again, your feet on the street in the courtroom, if you're a desk attorney doing basic evictions and basic legal work, you're toast. I use AI for free to evict a tenant in the state of Florida. It gave me step by step instructions. I didn't even need a lawyer. And the guy was gone. Okay. I tell you a funny story about AI. This is when I learned started learning the power of it. Cliff. So I used to pay somebody to write show notes to all my podcasts, because it was time consuming. It was a job I really did not enjoy. And, you know, then they came out with these note takers for zoom, and it would basically build a transcript of your conversation. And it would summarize it. So I was using that. And then I said, wow, if I combine it with chat GPT, what would happen then? And let me tell you, like, basically, I let that person go. I felt really bad because she was very talented individual. She was amazing. But, you know, money is money. And, you know, you got to, you know, you're always looking to control costs, right? So, so I know exactly what you're talking about here. We're doing it right now. Yeah. Like right now, where the transcript is being created by AI, as we speak, every, this machine is hanging on our every word. And we'll transcript this entire episode. I mean, come on. We, I agree with you. We were paying a guy at John. I love you. I think you're phenomenal. Just like Kerry said, we love the people we work with an employee. But at the end of the day, we're running a business. We were paying John around $50,000 year to be a creative writer. Well, guess who's more creative than John? Chat GPT. Right. The most creative ever. And I've just written a book. I've used the AI. The book is based on a series of interviews with this gentleman named Martin Armstrong, leading economist in the world, leading forecaster. And I had 14 years of recorded audio with him. And, you know, it was, it would have been impossible to do it any other way. But I summarized them. And then I, I used the, I used it to summarize, right? And that was that. So, amazing stuff. And it really is. So I, in my world, I want to embrace it for productivity, and of course, cost savings. But as I'm, but as I'm advising clients, I want them to be invested in businesses that will not be disrupted by AI. I mean, Liberty tax, I think like Liberty tax, H&R stock, I think they're toast. I carry, I believe they're dead. Yeah, I know. Yeah, I think not done. Even a question. No, I couldn't agree with you more. You know, handyman franchise, though. There's a shortage of handyman. So we wanted to create something called handyman university, you know, that you're exactly right. I want to be so what I have four themes that I like in, in business and franchising right now that I think have, let's say a 10, 20 year runway before really being disrupted. The first one I like is I believe that we have feminized men in America. When I say that, totally. Okay, creation to the choir here. Finitely more, you know, the audience, some people get offended, and that's fine. There are things that I believe it, and I say it. So I believe that we have feminized them not only with the foods they eat, lowering their testosterone levels, lowering their sperm count. Oh boy, you thought you saw it boys here. Right, right. There you go. You said it. So with that, in addition, excuse me, in addition to that, we've also as dads not taught our children how to use their hands, how to be into my entire that bingo, absolute light switch. First thing I did with my son, he got his car driveway, jacked it up, took all four tires off, put them all back on again, right? And then, and then he actually needed it. He's 16. He actually needed to remove a tire because he had, he had a curb and got a flat. And it was like that. I can't believe it. Like we just did this. And the average person to your point doesn't even know how to do that. So I do believe that people could use their hands. People who can be a handy man. People could do basic drywall work or plumbing or electrical or roofing or siding a window replacement and flooring. I believe that these people will be in high demand. I believe that we have shit on the trades for so long that we have created this, this gap, this major deficiency, right? Absence of people could use tools. Because we told them all to go to college to study things that they really don't want to study about and go into debt for 150 grand. Pottery and English history, you know, and stuff. Gender, gender studies, right? Gender studies and human, humanist studies. So, so how do you learn how to become a handy man? Yeah. I mean, what, so we had, we have a podcast as well. It's called Pursuit of Profit and the Guys. It's all franchise discussions. It's nothing like your show. Your show is very unique. So when you talk about that, we had a guy in the show and it's like, hey, how are you scaling your HVAC company? He ended up buying an HVAC company for four million and scaled it to 350 million. How? He went straight to the schools, went after the guidance counselors, who are the kids that you know are not going to college. I want to train him. I want to give him a skill set. I want to have them monetize a skill for the remainder of their life and I want them to work for me. And that's what he did. He created little, little schools and four states where he operated his HVAC company, recruited him straight out of high school, gave him a skill set. So, right now it's all about mentoring. It's, it's like Mike Rowe, stop insulting the trades, right? Stop. We have to stop that nonsense where we've made fun of people who said, I'm not going to college. I'm going to vocational school. I'm going to trade school. I want to be a journeyman. I like, we have to stop that. Not we need these people. Yeah. Driving over a bridge. Yes, exist without them. I know it exists. I mean, it's crazy to me. So I think that I think that after, and you know what I'm talking about, all these presidents of the Ivy League schools testified in Congress, each one looked like an idiot. One after the other after the other looked like a clown show. To run a hot dog stand those more. Absolutely. Absolutely. They were disgusting. Their answers were disgusting. Their view of the world is everything they have. Yes. Yes. I completely agree. I was completely disillusioned. I said, how the heck did she get to run the U of P and MIT, you know, and like all this crap? I mean, I just I know believe it, Cliff. I mean, I was in shock. So let's get back to our topic. We were here. So physical trades, dies who do tile, dies, kicks, kitchens, reading kitchens, bathrooms. What else? Yeah. You're not going to hope to fix cars soon. No food. So you don't hear me pushing food. I'm not pushing fitness. I like four categories. Number one, use your hands. Men's health. There's a war on men. I talked about it sperm count for Western male down 50% in the last decade. That is by design. As you introduce socialism, you introduce low T right? It's it's all coordinated. Second category. We're making me laugh now. Second category is the humanization of pets and animals. We humanize them. We're not repopulating. We humanize pets. Isn't that kind of sick? In what way, like talk to me. I mean, it's like, how do you like your pets? Not your dog isn't you might love them the pieces, but it's not a substitute for a person, right? Oh, right. That part is the illness part, right? Shressing them up and calling them your furry baby and not be able to function in society without petting your cat dog or alligator. This is where it's now becoming a mental illness or a human being running around thinking they're a cat or a fox is left. That is the same here. Let's be clear here. We're not saying there's anything wrong with having pets. We love pets. You and me both. I could tell you're a dog guy, but it's not a substitute for human interaction, which it's been posited push paths, right? Totally. We humanize them and you're exactly right. We so I'm only saying I'm not talking about the humanization. I'm saying as an investment thesis that the humanization of pets and animals is a huge opportunity for boarding, training, grooming, retail, anything involving these animals where you capitalize off of it. My third category is the aging grain of America where we're not repopulating. There's a lot of work to do, whether it's mobility, whether it's assisted living, whether it's a real estate play, whether it's a state sales and auctions or estate planning, franchising offers a lot of avenues to deal with the elderly and not just care for elderly. You could do a lot of just mobility. I have brands that deal with scooters, wheelchairs, striker beds, chair lifts and stair lifts and all that stuff. My fourth category that I like is everything around biohacking, which is becoming a huge move right now. I mean, I have lymphatic drainage brands that do over a million a year on average revenue. We have testosterone therapy brands that do over a million a year on revenue, which ties back to the number one category that we discussed. There's a lot in the biohacking space, whether it be peptides or NACs or just wanting to focus on things other than just cardio and strength training to get balanced, to get centered and to get healthier and beauty and vanity. So I put that all into category four, biohacking, beauty, vanity, the desire to feel youthful, the desire to feel whatever, beautiful or sexy, whatever you're looking to be helping. That's right. Those are my four categories. And I believe that clients that work with us, my business partner, Justin and I, in those categories end up seeing clarity and realize I'm AI proof. I'm Amazon proof. What we're talking about cannot be done through Amazon or Timo. Timo is becoming popular now. Take you from Cam. Timo is a total data mining scam. That's what I'm hearing. Yeah. Not a fan of Timo, but and I bought some stuff from them. They make their thing addictive. It's kind of like Amazon, but it's like Amazon on the cheap. It's like, all right. Well, Cliff, so to sum it up, your average client, what's their age demos? Yeah. Well, we're seeing younger people, but I think the average is going to be like 40s and 50s. They have a little, that money put aside. They have the liquidity. They have the ability to say I quit or they have the ability to keep their job in enough skill set bandwidth to run a business on the side by managing the manager. Average net worth for a client is probably 500 to 750,000 net worth. The average liquidity requirement that I need is around 100 and 150. That's almost not that much, really. I mean, it's 100 now. Do they get SBA loans or what do they do? That's exactly what we do to bridge the asset is we'll go to, we'll do SBA, small business administration loans or unsecured lines of credit. How much usually cost? I should say how much they usually have to borrow. What's the total all in cost? So in a non brick and mortar brand, your total investments between 100 and 150,000 on average, in a brick and mortar brand, you're starting investments, really, 3, 350 and up quickly, right? There's not a lot at that 3, 350 range, but it does start in there. But to your point, you quickly could get to a half a million. And yeah, and for the folks listening, it's like, well, how do I buy a half a million dollar brand? You would put up 30 percent of the size of the deal. So if you're looking at a $500,000 brick and mortar brand, you would be putting up $150,000 of your own capital. And then we would get you an SBA loan for the balance. Our underwriter requirement would be 30 percent cash injection. Really interesting. We're definitely going to have you back on your our official franchise expert appointed by the Financial Survival Network Cliff. Just tell us, how do we find you on the web? How do we connect with you? I'm name of the consulting company is Pronosity. So it's FRANOCITY.com. All right. Excellent. Links in the show notes this interview on financialsurvivalnetwork.com. And while you're there, we just ask that you sign up for your free newsletter. Over 60,000 of you have already. And hopefully more, we're shooting for 100 Cliff. Really appreciate you coming on. We'll talk to you again soon. Thanks for having me, Kerry. Thanks for listening to Kerry Lutz's Financial Survival Network, your solution to today's trying times. For the latest, go to financialsurvivalnetwork.com. Financial survival network, now more than ever.
