Welcome to Demystifying Franchise Ownership. The podcast that brings you expert advice, transparency, and clarity around franchise ownership, whether you are perspective or current franchisee or franchisor or simply curious about the topic. Say hello to your host, Christine Givens. Welcome back to Demystifying Franchise Ownership, where I share my knowledge, experience, and hard earned lessons learned about franchise ownership. Today's guest is Chris Long.
He's the founder and CEO of Long Yard Storage. I'll let Chris tell you about Long Yard's business model, but I'll say I wish I would have come up with this idea myself. I love it. Like many business concepts, Chris came up with the idea because he saw firsthand an underserved gap in the market. So welcome, Chris.
Thanks, Christine. Excited to be here. So let's start off with your background and how you got started in Long Yard Storage because it wasn't originally a franchise. Right? It was a business you started, and then you started franchising?
Exactly. So I found need in the marketplace that I had a problem with myself, and I was like, you know what? If the solution isn't there, I'm gonna start it. So, you know, started off basically getting into construction young. Actually, when I was 14 with my grandfather, I was kinda forced to work.
And, You were voluntold. We're voluntold. And, yeah, I started off with, you know, picking furnaces and doing ACs, which by the way, I do not like working with metal at all. I learned that very young. Also, I did appreciate, you know, when we turn on the heat for a house, we put on the AC, the the change it made.
So rooted in me is that appreciation for getting work done. So I got into construction at a young age, but I got into carpentry, became a licensed carpenter. And then immediately, I think it was 2013, I got my red seal as a licensed carpenter, started my company, Conrad Construction, which was named after my grandfather, Joe Conrad. So I ran that for about 10 years. And during that time period, I always loved real estate.
You know? So I bought my first house, bootstrapped it, turned into a duplex, bought my second house, turned into a duplex. Then I wanted to get into self storage, and I bought a commercial property. And this was 8 minutes from my house, and then I bought my house near that commercial property. Then all of a sudden, the light bulb goes off.
I'm like, I had all these tools, equipment trailers on my front driveway, and every time family would come over, I had to clean it up. My wife's like, Chris, clean it up. I had 4 trailers. I had a skid steer. I had all these tools and materials.
And then I looked in the marketplace, and everything that you needed to rent was for 1 to 5 years, 1 acre and above, and like a triple net lease. And I just needed something monthly. And I didn't need I need something bigger than a storage unit, but I also need a land and a yard space. And it didn't exist. I'm like, how come this doesn't exist?
Such a simple need. And so sure enough, I built and started long yards. And I started up with phase 1, which I had to, you know, sell and be scrappy to get started. And, sure enough, it was leased up in 6 weeks. And then with that, you know, we we basically built out the rest.
And now I'm in Florida. We're expanding internationally. I built a franchise. And a little bit about Longyear is how it started, why it started. And I'd say it was built for guys, contractors, you know, for their needs.
And, like, I solved the problem for myself, and now I'm solving it for many others. So do you feel like you were able to lease it up in 6 weeks because of all your connections, or was there just that demand out there? There was there was just that demand out there, and, there's just a supply and demand shortage for the space to begin with. So people are willing to commute to the right space as long as they are educated properly on the business model because a lot of people don't even know this exists. So it wasn't part of my contacts.
I mean, I was doing renovations. So, like, a lot of people I know are, like, electricians, plumbers, some carpenters, but these are more, like, the client avatar base. Like, it is a for a pocket of guys, like, in my industry, but it's there's also a lot others that need this. So, anyway, it was just sheer supply and demand shortage. Well, so speaking of your client, Avatar, give us do you have just one?
I'm sure you probably have a couple. Tell us about what they look like. Yeah. So a lot of these guys, they just need yard space, and it goes from, you know, corporate clients. There's a lot of, like you know, you got people that service the that are building developments or building housing in the area and need to store the lumber pile for the next 3 years.
If there's supply shortages, they can rely on their inventory being in the yard. You have car dealerships, used car sales lots. You have tow truck drivers. You know, you have contractors. You have people you know, landscapers with bigger equipment.
You have excavation companies. And then you have homeowners that are more like tinkers. They have a boat, an RV, an ATV, and they wanna put a shed in a yard and have a place to tinker on things and to store all their stuff. So we put a camera in the yard, power in the yard. If they need an office, they need a container.
So it's just like if you think about all the avatars that need a self storage unit, and then you think about how many people need a bigger yard, there's a long list of a lot of mostly blue collars and service based businesses, which are high profit, and they're gonna be there longer traditionally than a self storage, then it starts to give you this wow moment where a lot of people really need this. I mean, so many times, you you drive by a house that looks like how you described your house with an RV or a boat or all this equipment, and you know that they must have either recreational things they like to do, or they have a business that requires all this big equipment, and neighborhoods don't always wanna have it there. It isn't always as probably as safe being in front your front yard, so I can totally see how there be there's such a big need. Why did you decide to franchise the concept? Yeah.
Great question. Well, there's different ways for us to grow the business. I mean, I was very successful with the real estate on my first location. I bought it for 470,000. We put 700,000 into it.
Now it's worth over $5,000,000. And that that that massive that's commercial real estate. It's how much can this property make equals how much it's worth. And that's why a lot of people love what I'm doing because the real estate side, it's not only a great business, but it it marries the real estate state world with it. Well, the franchising is people that also love what I'm doing, and I could teach them.
And I can make a little bit of arbitrage with the royalties, but I'm they're also making a bunch off the real estate. But they can also we can also lease or franchisee can lease real estate. You just don't have to buy. This is a cash flow play. You just it's like land arbitrage.
Find a piece of dirt. We help you with that with our support and our systems to make sure it works in the right area, the right feasibility. And then, you know, for a franchisee, it's perfect. You know, it's it's passive business, self storage, has a 92% success rate, so it's a low failure. One part time employee, great cash flow, minimal work, and it doesn't even have to be an hour drive.
You can run this pretty remote with the right systems. So I figured, you know what? I wanna scale this and bring it everywhere, and I thought franchising was a great way to do it. Did you talk to anyone beforehand that said, hey. You should look at franchising, or was this just something that came to you?
No. I got a franchise broker network that reached out, and they were like, what are you doing? And they're like, oh, this is very franchisable. I think you should consider this alternative. And I sat on it for a while.
I wasn't really sure about franchising at first. I'm I'm a real estate guy. I wanna own the dirt, but it's a cash flow play. And, know, I open up my mindset to be like, a lot of franchising, they lease a space, and they're still making great money. Right?
So when I started kind of opening the horizon of opportunity, it it really started to make sense. So you you kind of gave a brief overview of what it means for a franchisee, but just give, an example of how it would work once you're introduced to a lead. Well, first of all, how do you get your leads? Well, people find me. I don't know what I'm doing now.
Find you? Or we're on you we we do content creation, and, I mean, people are just finding us. Like, wow. I love what you're doing. And whether it's through network of our clients or just social media.
And then, right now, it's in a few phases. Right now, we do what's called the go long or go home guarantee. And when somebody finds us, they sign up, and it's for 5 grand. It protects their territory, and then we help them find something and jointly. And then after that, you know, we decide to move to a a franchise, but it's like a small bridge that we built because a lot of people, they need to understand the real estate, and they need a a secure location.
So that's that's kind of the phase for now, that we have all the tools and systems to give a great level of confidence to finding a location and but they also help find location with the tools that we provide. So it's it solves a human capital and capital problem at the same time for the growth of the business by allowing a franchisee to help source a deal and to also be a financial backer for that deal. So once they identify a piece of property or a couple of pieces of properties, what are the next steps? Right. So then it goes through a franchise agreement, and this is all spelled out.
And then, you know, basically, we've already given them the tools to underwrite. So once we get into the real estate, then it's like the next phase. Right? Because we need you've already been consulted with the SBA, so we know you're prequalified for a certain amount. But then it gets you know, we do need to do need to do an executive summary.
We can do a business plan for the real estate. Obviously, we need to do more underwriting, more feasibility. So there's a whole due diligence process, and what we built out was called a development assembly line. This is a checklist from a to z for everything that you need to know when we're looking at a piece of real estate to make sure it's it qualifies, and there's gonna be no nasty surprises. Because with commercial real estate, like buying a house, when you buy a house, get an inspection.
Right? The inspector comes out, checks the AC, checks the roof, all those things. But commercial real estate, it's a lot more thorough. They're checking the dirt. Is it contaminated?
Are there gas lines that you can't find? So there's a lot of things that we work with our franchisees and our partners on commercial real estate to make sure there's no surprises for the dirt that they're gonna be involved in. So that's the next phase. And then it goes to the construction, which, again, we have a very thorough built out list, and then, obviously, we're supporting management, the lease up, and then up and running until everybody's profitable. Are these franchisees are all of them buying the the land?
None of them are leasing it. No. Is that right? No. It's about a 50.50 right now.
We have franchisees because the the barrier entry is a lot less expensive to, to lease. As an example, you could be between $38100,000 all in on lease. And you're the SBAs or 30 to 80 grand, using 90, 10. So the barrier to it's just a little less expensive where buying industrial real estate to be anywhere from 300,000 to 500,000 an acre. So a 5 acre parcel, 1,500,000 plus the build out.
You know, you're looking at a $2,500,000 acquisition at this point, which is a lot of cases, a lot higher of a buried entry for a lot of franchisees. It so that's why, like, some but some are more capitalized. They love the business model, and and, you know, we could do that as well. So it's about a 5050 depending on the liquidity and where a franchisee's at at this point in their life. Do you always want your franchisees to have been preapproved by the SBA up to a certain amount?
Yeah. And preapproved's kinda like, you know, they can never be a 100% preapproved. So Right. Like, okay. You are a very strong candidate for the program.
And then at that point, we start hunting within this reasonable range. But, obviously, we're not the bank, you know, and we can't give that a 100% approval letter. I have some, you know, candidates right now worth over $20,000,000 net worth, and even SBA is like, well, you know, you should work no problem, but until we because the deal can kill it as well. So the bank it's you and the deal at the same time. So we need to go through the due diligence and make sure that it's qualified.
So even if someone is very well vetted and they financially check, the property as checked. But that's why they're partnering with us to make sure that all works out. So Yeah. Obviously, before we look at something, we need to make sure that, you know, they could take it down. It could be a situation where the SBA doesn't like the actual piece of property, the deal itself.
Right? Right. If the dirt's contaminated, we find out in 6 weeks, well then, obviously, SBA is not gonna want that piece of dirt. So there's a lot of things like that as an example. Hidden gas lines, utility lines, setbacks.
There's there's a bunch of little nuances that we have to go through our our checklist to to find out. But we're aligned with the bank. We know that up front, and that's part of working with us. Do you work with a specific bank? Yes.
So then you already have the relationship and all that. Exactly. So when someone is meeting long hours, it's like, this is our this is our process. Get preapproved. Here's the buy box for the land.
Here's how you confirm the zoning. Here's how you underwrite it. Now here's our checklist. It's just like there's they don't have to worry about not knowing anything because we've been through the ropes. We're building it.
They this is our cookie cutter assembly line. Mhmm. We take you know, we have all the contacts that we need to get right from a to z with the whole process. How many how many franchisees do you typically have in process at a time, like, that you're working with to get up and running? That can vary, but it's a long life cycle.
Commercial real estate, your due diligence alone could be almost anywhere from 3 to 6 months. On the land itself, you mean? On the land itself. Yeah. So, you know, it's kinda like, you know, it's it's busy then stop type work.
Go go go stop. So with that being said, we can have a pretty decent amount, you know, around a dozen, probably being supported at once going through that life cycle of the of the deal flow. And then once they're leased up and they're running, then it's a lot more passive at that point. So it gives you an idea of the life cycle. How many do you have that are currently leased up, ready to go?
So I have my facility. We're still a new brand. I have my facility. You just started. Just started.
My facility is fully up and running, built out. Run the construction in Central Florida. We just put 2 more properties under contract, 1 in Texas, 1 in Florida. And then we have, franchisees that have signed multiple, and then we have franchisees that also also signed the go long, go home. The ones that are fully signed are more mature in the process.
The the one in Canada is fully up and running, and the other ones are are going through the process right now of development or lease up. Talk about the the process of franchising. When when did you actually start use when did you start thinking about doing it? Well, I cut the ribbon October 1, 2019. Okay.
And then so it's been a little while, but then I sat on the idea of franchising for a while for a little bit. And I I you know, I'm moving to the US, so we packed up and just literally went all into a state I've never been before to build a whole new business. So that came with a bit of a learning curve and new relationships. You know, I I probably sat on the idea for about a year before I was like Okay. Let's let's do it.
Because I see how fast some brands can grow, and that's one of the reasons. So that was when I cut the ribbon, and it's probably about a year or 2 after when I was fully built out with the FTDFA. Oh, okay. That's what that was the next thing I was going to ask. How was that process, especially with you being operating in both Canada and the US?
How was that process of coming up with the FDD and getting all basically ready to pull the trigger and start franchising? Yeah. It was fun because I'm like I started off Fun? Yeah. Fun to work.
Everything I go through is, like, fun. You know? Because I gotta I gotta put it in some bucket. And, so when I did the entire FDD in Canada, I'm like, okay. Now I got a a lead in Florida.
They're like, you don't have a US FTD. Like, what are you talking about? I got an FTD. I didn't even know that I didn't know you needed an FTD in Canada. I went for US, and different states have different laws and disclosure agreements.
So and when I say fun, it was like, okay. Let's redo my entire process because now I'm focused in the US, and it's like a simple thing that no one says bothers to think or say to you. Okay. You're building an FTD. This is what you need to disclose.
But did I know anyone again in the US? Nope. And my corporate structures, the way they talk to each other, there's a whole backbone of infrastructure that had to get established. So there was a whole foundation that had to get built before I could even present any documents to anybody. It's just part of the part of the process, but, yeah, it's been a lot of fun.
Using that term loosely. Fine. Which process did you find to be more difficult, franchising in the US or franchising in Canada? Well, because it when I first started, the French the FTD is kinda, like, pretty simple. So if you got your your your items and you just need to spell out your terms.
So when I built it out in Canada, it was pretty easy just to transfer over. And the company that I consulted with was very very friendly and supportive of doing that. So I found, you know, once the heavy work was actually and the lifting was done to to get it built out, going from Canada to US was actually pretty easy. When I say fun, it just took time. It took to about an actually maybe 8 to 10 weeks to kind of get that transferred, and then you got franchisees that are chopping at the bit, wanting to get involved.
So and I cooked the schools, anything, but that was pretty much the it it was pretty easy after it was built out. So the firm that approached you about franchising the idea, are they the ones who then led you through the process of getting franchised, getting all set up different? Okay. Did you use it what's that? They only call me, say their name.
I'm happy with them. Sure. Yeah. Sure. Go ahead.
Chris Connor. So FMS. Yeah. They're great great firm and, you know, different partners in Canada and the US. But no.
And still we we chat often and just great company. They've been really supportive. Did you use any other individuals outside of that group? You probably had an attorney. Yeah.
We had an intern an attorney do a final review and that I, you know, work intimately with often, for any negotiations or whatnot. How are you approaching growth within the franchise? Like, what's your strategy? Yeah. So the strategy, like, it's it's funny because I'm dancing in 2 worlds right now between buying the real estate corporately and franchising.
So franchising is more, like, organic lead flow that people come in. I'm not pushing it super hard right now. Also, I'm in the validation phase of my business where, you know, we we've proved concept. Now we need to do it 5 or 8 times, and we're being really selective with who we bring in. And because we're already kind of you know, maybe have room for a couple more to really secure great locations with a lot of support.
At that point, I'm I'm kind of got a fork in the road. Do I wanna do I wanna do it all corporately or just wanna go with franchising? So I I'm kind of in that discovery phase, and sometimes I wish I was more clear. It's like, yep. This or that, but there's so much money to be made in the real estate.
I can't I don't wanna shy away from it. And if you have a lease location from a franchisee that has a small area, well, now I can lose out on a 10 acre parcel right beside it that's worth you know, we can make 1,000,000 on. Now US is a big market. You know? So there's a lot of opportunity.
You know, the strategy right now is just get to the validation phase, and then I'm really gonna start putting a pedal down with the direction that I I more focus on afterwards. Like, how long have how have you defined the validation phase? Is it based on the number of franchisees you get through? Well, once I have, like, I I'd say 3 to 5 fully up and running and even least successfully leasing out with the data. Because there's a lot of metrics that I'm trying to back up that I wanna back up with on data points.
The HOAs, our small business avatars in the area, how much money we spend on each campaign in each area. Then I can get more dialed in with, you know, where the best cost of acquisition and everything else. So, yeah, I don't need much more for the validation phase. Some people say, look. You got one.
Just just go crazy. You don't need to go all out, but I really wanna make sure that the the next few are really well run and well executed, and then I kinda step it up. So I just need really 3 even in the lease up phase, and then my confidence is much, much higher. Well, I think that's a smart way to do it as far as not going too quickly. I think a lot of franchisors run into problems when they try to grow too too quickly.
They don't have the infrastructure in place. And if you can't serve your franchisees effectively and support them, chances are it's gonna be harder for them to be successful. That just hurts the franchisor in the end. Yeah. And I ran an infrastructure company for 10 years, and I've learned a lot of lessons.
And there was times where I took on more jobs than I can handle. And if you only have so many good people around you, it's hard to really, you know, fulfill the client's needs and to do the job that you committed to do. So then I ended up scaling back at one point, and I was making more money, doing less jobs, just being more organized. So to me, it's about being very efficient with your systems, having great people, and then getting everything your systems really ironed out. So once I get through this phase, then I'm more much more confident with the exact strategy and system.
So right now, I feel a good amount of confidence for the previous learning lessons I learning lessons I have, but each market has different nuances. Each state has different nuances, and each place is gonna bring different data points. So I really want to, learn as much as I can. And if someone signs up with us, like, it's really important for me when I shake their hand or say we're good to go, to do everything I can to make, you know, their dreams come true and make their vision a reality. So it's really important to me.
Are you trying at this point to just stay in certain states? Yeah. I mean, corporately, Texas and Florida. I mean, I'm in Florida, so I'd like to be a reasonable distance away for anything that's happening. Also, a lot of growth.
You have you're more business friendly, better for taxes. One of my biggest biggest expenses is snow. So by being in the south, I stay away from snow, and that's funny because it's like, you know, I don't have big CapEx. When people think about real estate, they're like, you know, insurance. What's your repair cost?
What's your your maintenance? What's your staff? Like, all of our costs are really low. So it's funny when I say the snow is one of our biggest expenses because it is. So being in the the, you know, the sunny states, I actually deduct one of my biggest expenses.
Also, it's just it's more business friendly. So there's a lot of check marks that work for those too. Also, a lot of blue collars, a lot of good infrastructure for us. So, yeah, corporately, Florida and Texas. What about franchise from a franchise perspective?
What states are you focused on? So right now, that's very opportunity based with a great lead that reaches out. We feel like they're a strong candidate. They're in a great market, and there's gotta be a lot of metrics that work for that market and the candidate that we want to be on our team. So, like, you know, a few of the check marks, it has to be a population over a 100,000 and above.
Ideally, actually, between half 1,000,000 and a 1,000,000. So we're not shying away because there's such a supply and demand shortage of our product that's gonna work in a lot of places. Doesn't just have to be Florida, Texas. So franchisees, like, does this will this work for me? In a lot of cases, there's a lot of growth in your area, then this business model could work for sure.
And you have to also consider you have to then be established to franchise in that state. Right? So you may have to consider that as part of your equation. Exactly. With the nondisclosure states.
So I think I think the the FTD is automatically good for about I forget how many the states have. I think not mid twenties around, if I'm not mistaken. So, I mean, we still have a lot of market share that we can capitalize. Plus, I wanna stay away from the blue states right now anyway. This is New York and California.
Just that's okay. For now, anyways, you you know, let them deal with their own problems. But in any case, there's still a lot of market opportunity for us, and there's a lot of money to be made. I know that you experienced, you know, in this journey to where you are right now, you you experienced some obstacles and challenges. Can you talk about some of those and how you overcome overcame them?
Yeah. Yeah. So, I mean, when I ran a construction company, as I was saying earlier, scaling, I was like, let's you know, I I was in a residential space doing high end work, and I was a high end carpenter, so I learned a lot of great skill sets. Then I decided to diversify and get into commercial real estate, and then it was with a large big box store. So I was like, okay.
This is safe. Right? This is a great opport opportunity, but it turned out to be one of the worst decisions I ever made. Everything that was promised to me or that looked good on the surface turned out to be the complete opposite. And the worst part is I actually stopped going into the residential where I was really making my my meat and potatoes every day to go into this new venture, because I it sounded so good with all the bells and whistles in the surface, and it turned out to be nothing but the opposite.
So doing that and going to that, you know, attractive shiny object ended up getting really painful. I went from 12 employees, almost back to myself, to 1. Like, it really set me back quite substantially, And that taught me a lot. Like, I learned I got a lot of scars and bruises from that that phase of my life, but a lot more valuable lessons I came with it and just why? What was so powerful about that is I bounced back and I became financially free two and a half years later From going from 12 employees, buying real estate, to almost losing everything, going back to on the ground to oh, everything I learned, that's when I started long yards.
I was like, k. I'm gonna do things. I'm just gonna do it differently. I'm gonna take everything I learned, go into this business, and then now it's a cash cow, and, you know, I don't have to work. I'm just I love what I'm doing.
At this point, I created financial freedom. But that was a point of my life where I learned a lot of lessons. It was definitely, a low phase for me when, you know, it was painful. What about you personally do you think gave you that perseverance and all that to to just keep going forward? Because I think for a lot of people, that could dissuade somebody from trying new things again, or trying something new?
Yeah. It's a great question. Because it was it it was really hard. I mean, it was a point where I couldn't even put gas in my truck. That's and I have a daughter young, so I think she was around 7 at that point.
And, I mean, I was a single dad and just raising her, so it made her really painful. But I think that's why I couldn't fail, because I I had a daughter, and it's like, okay, Chris. You know, there's no excuse. Like Yeah. Just lessons.
Failure is not an option, and that really forced me to, you know, tighten up the boots and keep chopping at the bit. And I remember doing a video and telling myself, you know, sometimes it's a little inspirational video. It's like, you can't fail. Keep going. Do this video for yourself.
Sure enough, I said in the video, in 3 years, you're gonna look back and be proud of this. 3 years later, I was a multimillionaire and financially free from being at that low point. So I I I think if I could put it to one thing, it was probably, like, being a dad. And I don't know if it's just having a a daughter and being more of a provider and a protector where I just felt like failure simply wasn't an option. And then that's what it was.
Yeah. I always had hard work engraved in me just growing up with my grandfather and selling Chocware since I was 14. I I would knock on doors. If I heard no, I I would just kept knocking till I heard a yes. So I always knew the mindset being at a younger age that there's always going to be a yes and a way to solve a problem.
You just have to keep moving forward. And, you know, you don't always have the answers, but you know far enough in front of you that if you keep marching forward, you will find the answer. And I I think just adopting that mindset at a young age gives me to this day the perseverance to really get through anything, because I I just know there's there's always a way. There's always a way. When you look at franchise candidates, is that something that you wanna see in their character build?
It's funny because it I I think it's far and few between a lot of people. You know, if I was really selective and said I want someone that only went through the pain hurdles like I did, it'd be a small group of people. But I and I also don't like to judge people so much because some people, you know, when the going gets tough and they may seem mellow on the surface, they really buckle down and and do the hard doing. No. I I I know I don't shy away from that.
I do like to see some, like, business experience. I like to see some fashion of grit that they've been through something and that they're willing to go through the difficulty. And I like to vet them on the first few calls to kinda sniff that out. But because my business model now that I've built it, it's really it's simple but not easy, because when it's running, it's simple, but there's a heavy lift to get it to that point. And this is where the grit needs to come in.
I don't I don't need to be someone that's gone through war, but they they need to understand, and I need to set the expectation for them, which is really important that it's gonna be difficult anywhere from 6 months to 2 years. So I I need to make sure that, you know, during that that phase that they're willing to do what it takes to get through, the heart before it gets easy. And get and be patient too. Absolutely. Because I know when I entered into when I sign sign my franchise agreement, of course, there were certain within the franchise agreement, there were requirements on when you had to open by certain dates and all that.
And I took those very seriously. Of course, I didn't want to default on the franchise agreement, but I think I should have been pickier about, the location that I took. And and if I wasn't happy with it, I should have gone back to the franchisor and said, hey. I can't find what I really think is a great location. Can we adjust this?
But I was impatient, and that definitely contributed to some of my challenges, like a location, location, location. You need a good location. Absolutely. Especially with us. I mean, industrial real estate is a very scarce asset class.
It's really difficult. Cities frown upon it, and there's a big entitlement process. So for us, you know, picture you're opening up a salon or cookie business. You got your permits. You you know, you do your drawings.
It's pretty simple. The outside of the shell is there. You're just changing the inside. For us, we have to go through, in some cases, complete civil engineering. You need to and this could be 6 to 12 months of sunken cost that you're not going to get back for the commercial real estate that you need to obviously build on.
So this is a big part of, you know, making sure someone has patience, perseverance, and grit to get through. And it's also a bit of risk because you can get through the process, and something happens that was unforeseeable, and then, you know, all of a sudden those costs are gone. And that does happen. So we try to avoid it, but there's just, you know, so many unforeseen things that you just you can't do. Right?
There's just you can get to 98% or 2%. It's just if any I have 2 rules in life. No matter how much you plan for things, it's gonna take longer, and it's gonna cost more. And just, you know, unfortunately, no matter how much you plan, set that expectation going into it because it's a good mindset to have because you need to be prepared for that to happen. Both things considered the entitlement process.
The there's a lot of patience that needs to happen. But But on the flip side, when you get through that I mean, I visited my location once in the last year and a half. You know, there there is light at the end of the tunnel, and it's very nice when you get there. Do you do you have someone on on-site? Yeah.
So what we call is a boots on the ground, like a self storage facility. We need to have someone that just goes, checks, make sure the gates are operating properly. You know, there's no dangerous potholes. Like, gates are closed, fabric's looking good. It's just basic checklist.
People are following the lease agreement, following the rules. You know, it's it's a part time employee, one part time employee. And that's it. And you do need someone to take phone calls and manage that. So it's actually a 2 tier management system.
You have someone who's taken the calls, and that could be either the franchisee or the partner, and then you have them make sure the boots on the ground is doing what they're supposed to be doing. But that's basically it. So the process to get to opening could be long, a little bit painful, require some patience. But once you get there, it should be closer to what we call semi absentee than anything. Maybe maybe even beyond semi absentee because you're not there.
You're personally not there. Yeah. It it is like self storage. It's exactly it is self storage except it's less of a build out. Instead of building, it's it's fencing.
It's crushed stone. So people look at what world of business do I get into? It's like, this has the best of both worlds. It's low cost. It's quick.
Even quick relatively speaking, it's still you gotta go through that life cycle, but your build out in construction is very more predictable, understandable, less risk because there's so much more or less to it. And then so I don't know if you ever used a sales force facility or anyone's part to both of those. How much management is there? You have your gate code. You put your credit card payment in.
That's it. And you as an as a tenant, as a client, your expectations are low. You you know, as long as your stuff is being burnt or blown up or stolen, you're pretty happy. Set it and forget it. Credit card and let the money roll in, and that's pretty much that's what it looks like when it's up and running.
How many people do you have on your corporate team? So on the corporate team, it's small. It's just 4 of us right now. And how do you determine territories? Do you have well, tell me.
What's your process? How do you determine territories? Yeah. So there's a few different mapping tools, that we use, but the biggest thing to keep it simple is, one franchisee will want a certain territory, and then it's in 2 phases. For 1, we'll select the territory.
Let's say a fry a franchisee just signed Nashville. He has all of Nashville. And then once we find the location, then he he has a perimeter protection around the location he chooses for the that we choose for the location. And this is basically based on the size. So it's about 1.5 mile per acre.
So it's 10 acre site. It's got a 15 mile radius. And it depends. You know? It could be a few nuances, a drive distance, or roads setbacks.
And then after that, he has a first refusal, in this case, for the rest of Nashville, but the rest of Nashville is now open up to further opportunities. So because the deals are so far and few between with industrial real estate that we need to cast a wide net, select a location, and then we go and then it gets more granular after that. How how do you determine once that franchisee's territory is set, you know, in that second phase, how do you determine whether a client or a customer's within or outside of that territory? Oh, so that's just yeah. Right now we're working on the data for that because there's so many people coming from so many different distances.
That is kind of they oh, you know, you only can travel to this Longyear. Like, my location, if you look at Longyears in Ottawa, we're still quite the distance from the core of Ottawa, but we're on a main route. We have a lot of great demographics, a lot of great growth, but we have clients coming from everywhere. It's it's different because of storage, and I I don't you know, if we have a lead if if we had multiple locations and they were in a different different ZIP code, then that's when it become more it could go towards this this location because they might not know it exists, but we haven't got to that point yet. We don't have multiple locations in one area to have to get to that nuance point of making sure that we're filtering the clients for the right the right facility.
Got it. Okay. So that's a to do when you get into it. Yeah. And our locations are far and few You know?
So, I mean, it's still it's still a good distance. And and, also, industrial pockets in cities, they're also far few between. I don't know if you like, most industrial pockets are near airports or on the outside of the city. Yeah. And of them.
So where the rest is more agricultural or residential real estate. So, also you only have so many areas that could work for a long arrears. You know, in a lot of cities, you might get 3 or 5 anyways. You know, you're you're not gonna get a 30 or 48. If you had, say, a 10 acre property, how many how many tenants would you most likely have within that space?
Yeah. Depending on layout of land, I would say probably between 6080 commercial tenants. Oh, okay. Okay. So that's a lot.
Yeah. And, I mean, I guess that's part of it too is once you have multiple territories in similar areas, each franchisee is restricted by, you know, the number of spaces they have. Right? It's not as if they can just keep accepting customers. They have a limit.
Yeah. Exactly. They have a limit. So once you reach about 90% occupancy, then you're good. The ad spend goes down, and then your churn is very low.
Once people are there, they're set up. They're usually staying for a long time. Our life cycle of our client, our lifetime value is is very long. You know, our data is still new because we've only been around so long, but we've had the same clients for a long time. Once they set up, they don't need to go anywhere.
They don't want to go anywhere. It's it's it's not like you keep selling. It's just you lease up, and then, you know, I you either expand or finance you know, additional revenue streams too. We're selling and renting products at our location, which gives more money to the franchisee. And so there's you know?
But, yeah, it's it's a bit different in that in that sense where it's an occupancy, which is more self storage style business. Well, I really appreciate you coming on today and talking about your experience, your challenges, your journey to where you are today. I think it should give a lot of people, you know, some hope that they if they've experienced some failures in life, that that doesn't mean that they can't experience success down the line. So I think that's great. And sharing the business model because I think it's super interesting.
I wish I would have thought of the idea. Tell the listeners how they can get ahold of you and all that. Yeah. So just go to longairs.com, and you could complete a form, which, will get all the information. And you could also email me at clong@longairs.com.
I'm happy to, connect. And you're on LinkedIn too. I'll make sure to have all that in the show notes. So well, thanks, Chris. I so appreciate you coming on today.
I'd like to have you, Christine. Appreciate it. Thanks to Chris Long for appearing on this week's episode. All of Chris' contact information will be in the show notes. If you're currently evaluating a franchise system, make sure you get my guide called the ultimate step by step guide to vetting and evaluating franchise opportunity.
You'll find that resource on my website. Don't hesitate to reach out to me via email by going to the contact page of my website, christinegibbons.com. As always, tune in next week, and thanks for listening.