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Sep 7, 2016 · 21m · top-founders

EP 410: From Worker to Owner Does $5m in 2015 Franchise Model with Josh Herron of 1800GotJunk

Josh Herron · 10m spoken Nathan Latka · 8m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top, host Nathan Latka interviews multi-unit franchisee Josh Herron, who details how he transitioned from frontline route manager to co-owning multi-million-dollar 1-800-GOT-JUNK and You Move Me franchises through distressed acquisitions, bootstrapping, and capital reinvestment.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 43.1% of the talking time here. How this is scored →

Nathan as informed peer 3.0 Guest teaching 1.8 Guest disagreement 1.0 Nathan pushing back 1.7
05100:0010:0020:002:12–4:56 · Nathan as informed peer 3/10 Transitioning from Route Manager to Franchise Co-Owner Nathan establishes Josh's background and prompts him to share the story of buying into the franchise after working as an employee. The exchange is straightforward and collaborative.4:56–9:21 · Nathan as informed peer 5/10 Historical Unit Economics and Market Consolidation Strategy Nathan presses Josh on the purchase price and historical margins of the franchise. Josh deflects giving specific acquisition valuation figures while explaining that market consolidation was necessary.9:22–14:12 · Nathan as informed peer 5/10 Franchise Selection Benefits and Truck Financing Requirements Nathan probes truck financing economics and jokingly challenges Josh on whether his carpet cleaning business 'failed like a dog.' Josh corrects the framing by explaining they sold it for $100k to break even.14:12–16:39 · Nathan as informed peer 3/10 Capital Reinvestment and Generating Wealth Through Operations Josh quickly corrects Nathan's math when Nathan calculates 20% of $5 million as $100k instead of $1 million. Josh then discusses how operational efficiency drives wealth generation in franchising.16:42–18:44 · Nathan as informed peer 0/10 Sponsor Endorsements for TopTal and HostGator This is a solo ad read segment for TopTal and HostGator by Nathan, containing no guest interaction.18:45–20:13 · Nathan as informed peer 2/10 Rapid-Fire Questions and Career Reflections on Persistence Nathan runs through standard rapid-fire questions regarding Josh's favorite book, routine, and advice to his younger self in an entirely cooperative tone.2:12–4:56 · Guest teaching 1/10 Transitioning from Route Manager to Franchise Co-Owner Nathan establishes Josh's background and prompts him to share the story of buying into the franchise after working as an employee. The exchange is straightforward and collaborative.4:56–9:21 · Guest teaching 3/10 Historical Unit Economics and Market Consolidation Strategy Nathan presses Josh on the purchase price and historical margins of the franchise. Josh deflects giving specific acquisition valuation figures while explaining that market consolidation was necessary.9:22–14:12 · Guest teaching 3/10 Franchise Selection Benefits and Truck Financing Requirements Nathan probes truck financing economics and jokingly challenges Josh on whether his carpet cleaning business 'failed like a dog.' Josh corrects the framing by explaining they sold it for $100k to break even.14:12–16:39 · Guest teaching 4/10 Capital Reinvestment and Generating Wealth Through Operations Josh quickly corrects Nathan's math when Nathan calculates 20% of $5 million as $100k instead of $1 million. Josh then discusses how operational efficiency drives wealth generation in franchising.16:42–18:44 · Guest teaching 0/10 Sponsor Endorsements for TopTal and HostGator This is a solo ad read segment for TopTal and HostGator by Nathan, containing no guest interaction.18:45–20:13 · Guest teaching 0/10 Rapid-Fire Questions and Career Reflections on Persistence Nathan runs through standard rapid-fire questions regarding Josh's favorite book, routine, and advice to his younger self in an entirely cooperative tone.2:12–4:56 · Guest disagreement 0/10 Transitioning from Route Manager to Franchise Co-Owner Nathan establishes Josh's background and prompts him to share the story of buying into the franchise after working as an employee. The exchange is straightforward and collaborative.4:56–9:21 · Guest disagreement 2/10 Historical Unit Economics and Market Consolidation Strategy Nathan presses Josh on the purchase price and historical margins of the franchise. Josh deflects giving specific acquisition valuation figures while explaining that market consolidation was necessary.9:22–14:12 · Guest disagreement 3/10 Franchise Selection Benefits and Truck Financing Requirements Nathan probes truck financing economics and jokingly challenges Josh on whether his carpet cleaning business 'failed like a dog.' Josh corrects the framing by explaining they sold it for $100k to break even.14:12–16:39 · Guest disagreement 1/10 Capital Reinvestment and Generating Wealth Through Operations Josh quickly corrects Nathan's math when Nathan calculates 20% of $5 million as $100k instead of $1 million. Josh then discusses how operational efficiency drives wealth generation in franchising.16:42–18:44 · Guest disagreement 0/10 Sponsor Endorsements for TopTal and HostGator This is a solo ad read segment for TopTal and HostGator by Nathan, containing no guest interaction.18:45–20:13 · Guest disagreement 0/10 Rapid-Fire Questions and Career Reflections on Persistence Nathan runs through standard rapid-fire questions regarding Josh's favorite book, routine, and advice to his younger self in an entirely cooperative tone.2:12–4:56 · Nathan pushing back 1/10 Transitioning from Route Manager to Franchise Co-Owner Nathan establishes Josh's background and prompts him to share the story of buying into the franchise after working as an employee. The exchange is straightforward and collaborative.4:56–9:21 · Nathan pushing back 4/10 Historical Unit Economics and Market Consolidation Strategy Nathan presses Josh on the purchase price and historical margins of the franchise. Josh deflects giving specific acquisition valuation figures while explaining that market consolidation was necessary.9:22–14:12 · Nathan pushing back 4/10 Franchise Selection Benefits and Truck Financing Requirements Nathan probes truck financing economics and jokingly challenges Josh on whether his carpet cleaning business 'failed like a dog.' Josh corrects the framing by explaining they sold it for $100k to break even.14:12–16:39 · Nathan pushing back 1/10 Capital Reinvestment and Generating Wealth Through Operations Josh quickly corrects Nathan's math when Nathan calculates 20% of $5 million as $100k instead of $1 million. Josh then discusses how operational efficiency drives wealth generation in franchising.16:42–18:44 · Nathan pushing back 0/10 Sponsor Endorsements for TopTal and HostGator This is a solo ad read segment for TopTal and HostGator by Nathan, containing no guest interaction.18:45–20:13 · Nathan pushing back 0/10 Rapid-Fire Questions and Career Reflections on Persistence Nathan runs through standard rapid-fire questions regarding Josh's favorite book, routine, and advice to his younger self in an entirely cooperative tone.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 79.3% · guest 20.7%0:00 · Nathan 79.3% · guest 20.7%3:00 · Nathan 28% · guest 72%3:00 · Nathan 28% · guest 72%6:00 · Nathan 13.9% · guest 86.1%6:00 · Nathan 13.9% · guest 86.1%9:00 · Nathan 22.2% · guest 77.8%9:00 · Nathan 22.2% · guest 77.8%12:00 · Nathan 26.6% · guest 73.4%12:00 · Nathan 26.6% · guest 73.4%15:00 · Nathan 52.1% · guest 47.9%15:00 · Nathan 52.1% · guest 47.9%18:00 · Nathan 67.1% · guest 32.9%18:00 · Nathan 67.1% · guest 32.9%21:00 · Nathan 100% · guest 0%21:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 11:33 Josh refutes business failure label

Josh directly rejects Nathan's framing that the carpet cleaning venture 'failed like a dog,' pointing out that they actually sold the business to break even.

 Hardest push from Nathan ▶ 6:24 Nathan insists on getting deal terms

Nathan refuses Josh's initial deflection regarding the acquisition valuation, calling him the 'inside guy' and pressing him to share the purchase price.

 Biggest teaching moment ▶ 14:20 Josh corrects basic math error

Josh politely pauses and corrects Nathan on air when Nathan miscalculates 20% of $5 million as $100,000 rather than $1,000,000.

 Nathan holds their own ▶ 10:44 Nathan drills into capital requirements

Nathan demonstrates operational financial knowledge by calculating the $250k capital outlay needed for a 5-truck fleet and questioning the specific debt financing structure.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Transitioning from Route Manager to Franchise Co-Owner 3101 Nathan establishes Josh's background and prompts him to share the story of buying into the franchise after working as an employee. The exchange is straightforward and collaborative.
Historical Unit Economics and Market Consolidation Strategy 5324 Nathan presses Josh on the purchase price and historical margins of the franchise. Josh deflects giving specific acquisition valuation figures while explaining that market consolidation was necessary.
Franchise Selection Benefits and Truck Financing Requirements 5334 Nathan probes truck financing economics and jokingly challenges Josh on whether his carpet cleaning business 'failed like a dog.' Josh corrects the framing by explaining they sold it for $100k to break even.
Capital Reinvestment and Generating Wealth Through Operations 3411 Josh quickly corrects Nathan's math when Nathan calculates 20% of $5 million as $100k instead of $1 million. Josh then discusses how operational efficiency drives wealth generation in franchising.
Sponsor Endorsements for TopTal and HostGator 0000 This is a solo ad read segment for TopTal and HostGator by Nathan, containing no guest interaction.
Rapid-Fire Questions and Career Reflections on Persistence 2000 Nathan runs through standard rapid-fire questions regarding Josh's favorite book, routine, and advice to his younger self in an entirely cooperative tone.

Statements from this episode (10)

Prediction Didn’t hold up
Latka: Will Take Send Later Public by Age 30
“I'm taking Send Later public by the time I turn 30.”
Nathan Latka Sep 7, 2016 ▶ 1:15
Assertion Not checkable as stated
Herron: Kansas City Franchise Generated $650,000 Prior to Acquisition
“At that point it did, gosh, seven, like 650 grand.”
Josh Herron Sep 7, 2016 ▶ 5:06
Assertion Not checkable as stated
Herron: 1-800-GOT-JUNK Franchises Operate at 20% to 25% Profit Margins
“Our expectations anywhere from, you know, at this point in the system, we expect anywhere from 25% margin to, you know, it's a high margin business, 20 to 25%.”
Josh Herron Sep 7, 2016 ▶ 5:14
Insight
Josh Herron: Kansas City required franchise consolidation to be viable
“It was three franchises. The city's not big enough for all three of us. So we understand that there has to be consolidation at some point for us to make it into a viable business.”
Josh Herron Sep 7, 2016 ▶ 6:06
Disclosure
Herron: Oxi Fresh Franchise Cost Around $25,000 to Launch
“So the OxyClean was low cost. I believe it was like 25 grand total.”
Josh Herron Sep 7, 2016 ▶ 10:28
Assertion Supported
Herron: 1-800-GOT-JUNK Trucks Cost $50K to $55K Per Vehicle
“You have to buy the trucks, which are around 50 to 55,000 dollars per vehicle.”
Josh Herron Sep 7, 2016 ▶ 10:40
Assertion Not checkable as stated
Herron: Sold Oxi Fresh Carpet Cleaning Franchise for $100,000
“We ended up selling it for a 100,000 dollars.”
Josh Herron Sep 7, 2016 ▶ 11:58
Assertion Not checkable as stated
Herron: Franchise Operations Generated $5.5 Million Top-Line Revenue in 2015
“Last year, top line, we're about, you know, five and a half million.”
Josh Herron Sep 7, 2016 ▶ 12:44
Assertion Not checkable as stated
Herron: Omaha franchise location grew revenue 134% year-over-year
“For instance, in Omaha We're up 134% over last year, which is pretty significant.”
Josh Herron Sep 7, 2016 ▶ 13:27
Assertion Contradicted
Latka: 1-800-GOT-JUNK Generated Over $250 Million in Revenue in 2015
“Brian is the founder of one 800 got junk, and it did over a quarter of a billion dollars in 2015.”
Nathan Latka Sep 7, 2016 ▶ 20:36
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