How do you define and find happiness? Do you find happiness in your work and what you do? Our guest today is Richard Rees, and he shares with us how he has found happiness when he was a starving entrepreneur and as successful investor.
Richard built a successful digital music distribution company that he took public and was eventually purchased by Sony. He also co-founded the group that acquired, took public, and grew The Joint franchise system from 10 locations to more than 800 locations today.
LINKS FROM THE EPISODE:
- You can visit our guest’s websites at: http://businessventurescorp.com
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ABOUT OUR GUEST:
Mr. Rees has over 30 years of experience in entrepreneurial organization, building and operations. Currently a partner in Monarch Ventures, Inc. an active investor in early-stage dessert companies, that have the potential of becoming a franchisor.
Mr. Rees is also COO of Business Ventures Corp.,investment banking firm focused on consolidating disruptive sectors primarily through the public equity markets. Early in his career Mr. Rees owned and built 2 FM radio stations, created one of the first online digital music distribution companies (pre I-POD).
Mr. Rees co-founded the group that acquired and restructured The Joint Corp. in 2010, and managed The Joint’s public offering in 2014 (NASDAQ: JYNT).
ABOUT BIG SKY FRANCHISE TEAM:
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Tom DuFore, Big Sky Franchise Team (00:01):
Welcome to the Multiply Your Success Podcast, where each week we help growth-minded entrepreneurs and franchise leaders take the next step in their expansion journey. I’m your host, Tom DuFore, CEO of Big Sky franchise Team. And as we open today, I’m wondering how you define and find happiness, and do you find happiness in the work you do and what you do each day? Well, our guest today is Richard Rees and he shares with us how he has found happiness when he was a starving entrepreneur and as a successful investor. Richard has had quite an impressive career having built a digital music distribution company that eventually took public and was later purchased by Sony Records.
Tom DuFore, Big Sky Franchise Team (00:45):
He also co-founded the group that acquired, took public, and grew The Joint franchise system from 10 locations to more than 800 locations today. You’re going to love this interview and the insights that Richard provides. Let’s go ahead and jump right into it.
Richard Rees, Business Ventures Corp. (01:01):
Thanks for having me on. Richard Rees. I’m a partner in Monarch Ventures and also the COO of Business Ventures Corp. Monarch Ventures is a group of advisors with franchising and business operation organizational experience seeking to invest in and be an active investor in concepts that we think are interesting and in particular in the dessert space right now. Business Ventures Corp. is a group of individuals who have taken several companies public in disruptive sectors. Right now BVC is on hiatus because two of the three members are basically semi-retired, but we still are looking at opportunities.
Tom DuFore, Big Sky Franchise Team (01:47):
I’ve had the good fortune of working with you here for coming up on, what, about a year or so now and being connected in various capacities. This interview to me has been a long time coming. You’ve been on my list of folks I’ve been wanting to get in for an interview, so I’m glad that we’ve been able to do this. One of the things that I’d just like for you to share is just a little background, because you have such a great comprehensive background of building companies, taking them to the next level. I’d just love for you to share that for the listeners.
Richard Rees, Business Ventures Corp. (02:20):
As background, I always enjoyed the music business and music in general. I took the passion of music and tried to figure out and did figure out successfully how to make money on my passion for music. I began booking bands in high school. That led me to a job at a radio station as a salesman, and then became a salesman manager, and then eventually became a general manager. I saw that the business owners were the guys who made all the money, so I said I want to go out and buy a radio station of my own. I took a path and brought together a group of investors and also a mutual acquaintance of ours and went out and bought my first radio station.
Richard Rees, Business Ventures Corp. (03:06):
Continued on that path, bought a second radio station. Actually it turned out to be the very first radio station I ever worked at. That came full circle in 10 years. That was just incidental. It wasn’t pre-planned, but it just worked out that way. Sold the radio stations fast forward, started again with my passion of music. How can I make money and bring music to the masses and to people? I started a record label and a digital distributor. We became one of the first digital distributors on iTunes right at the launch of the infamous iPod. Eventually there was only so many of us doing the digital distribution in that space.
Richard Rees, Business Ventures Corp. (03:49):
I was approached by Business Ventures Corp. CEO who lived in Austin as well and he was curious about what we were up to and he said, “If you can gather up a few of your acquaintances or your peers, we’ll take you public.” That went public. Did very well. It was eventually bought by a division of Sony. Sony still owns it. Fast forward, Business Ventures and I, again, opportunity knocks in Austin, Texas. We ran into a concept called The Joint Chiropractic. I had always used chiropractic throughout my life, if you will.
Richard Rees, Business Ventures Corp. (04:28):
The unique thing about the model was it was no appointments, which always drove me crazy with chiropractors because they kept crazy hours, and it was a cash based model. We went, “Well, this is really intriguing.” We went out and found the owner. The Austin location was a franchisee. There was around 10 open at the time. It was back in 2009. Made a deal with Dr. Fred Garretson, the founder of The Joint and said, “Listen, we’ll put some money in, but we’re going to surround you with a great team of people.” He was more than willing to admit that he knew what he didn’t know and let us run with it.
Richard Rees, Business Ventures Corp. (05:11):
That eventually went public and that has gone from 10 locations back in 2010 to over 800 now, and they’re on path to be at 1,000 by the end of 2023. That’s their goal. That company went public in 2014-2015, but I was actively involved in the first four years as a board member. We were very, very hands-on. But over time, we built a team to where we solely stepped back. From there, I don’t want to say I’ve been going after things that I’m passionate about and also working with people that I enjoy working with. As you know, our mutual acquaintance, Eric Slaymaker, and I go way back and we kept looking for an opportunity to work together again.
Richard Rees, Business Ventures Corp. (05:58):
We were business partners first, became very, very good friends later, even though we were involved earlier. But fast forward, we’ve been looking at different opportunities and we know what we don’t know. Really we also would like to give entrepreneurs our experience as an advisor or an active investor. There’s a lot of building blocks. I call myself a serial builder, because frankly after three or four years, I’ve brought in a team, if I’ve done my job right, that can run the show and enjoys running the show. If you reward the team well, they’ll take care of you.
Richard Rees, Business Ventures Corp. (06:44):
Again, that comes back to also picking the right team and a lot of nuance is involved there. I mean, as you know, there’s a lot going on in picking the team and managing the team, et cetera.
Tom DuFore, Big Sky Franchise Team (06:56):
Thank you for sharing the background there. I just want folks when they listen into this to understand the depth and breadth that you’re bringing to this equation. As you’ve invested in, taken companies public, grown brands, been this business builder, what have you noticed about some commonalities or common themes between some of the organizations or leaders or companies that you’ve helped take to that next level and grow?
Richard Rees, Business Ventures Corp. (07:23):
It’s really about a good team and also a good board, whether that’s a formal board of directors or a group of advisors or relying on a network. For me, I think the biggest impediment that entrepreneurs and business owners put on themselves, if you will, is that they think they can do it all. Early on, I was lucky enough to now look into the rear view mirror and say, “Well, these people were actually mentors. Well, they were people that were just helping me along the way.”
Richard Rees, Business Ventures Corp. (07:54):
And back then, I didn’t really know the term mentor. And then finally I went, “Oh, those guys were helping me out because somebody else had helped them out.” I think that is the big takeaway for me is a business owner or entrepreneur that is open to ideas and knowing that they cannot do it all.
Tom DuFore, Big Sky Franchise Team (08:16):
That makes a ton of sense. So much of our audience oftentimes being franchisors, merging franchisors, business leaders that are thinking of franchising. They’ve got franchising on their mind in some capacity. What have you found as some of the common characteristics in these different franchise ventures and organizations and groups you’ve been involved with? What are some things you’ve seen that help make a successful franchise system?
Richard Rees, Business Ventures Corp. (08:43):
Successful franchise system, I think, that if you just take a look as a franchisor, sticking with that subject, is you really got to offer your franchisee a business in a box. You got to be able to offer them all the training materials. The great thing now versus when we first started The Joint is there’s a lot of online tools now available that are able to put that training into online systems that weren’t available before. You need to have great marketing systems. I mean, marketing has changed rapidly. You need to stay on top of that. I mean, social media wasn’t even in existence back in 2010. Now it’s the primary vehicle for promotion.
Richard Rees, Business Ventures Corp. (09:27):
But really you need to be aware that when that person writes you a check, there is an expectation of what you’re going to deliver. You’re never going to get it perfect, but you also have to have some good two-way communication. We learned a lot and still learn a lot. For example, at The Joint, I’m not again involved even on the board level anymore, but I still hear feedback. I still go into the clinics and you hear, “Oh well, there’s a new idea that a franchisee had.” You need to be open to that two-way communication.
Richard Rees, Business Ventures Corp. (10:02):
But make no mistake about it, you need to provide them that foundation to where other than actually physically hiring the people that are working there, you’ve trained them to where they can turn on the lights and open up the door and operate the business. If you’re not ready yet, you really shouldn’t franchise.
Tom DuFore, Big Sky Franchise Team (10:24):
That makes sense. I like how you said that it’s not going to be perfect. The importance is having that two-way communication. So that way then where those imperfections exist or challenges arise, you have a really nice working relationship between the franchisee and the franchisor so that you can sort it out.
Richard Rees, Business Ventures Corp. (10:45):
Exactly. And also I have seen franchise systems that are so rigid to where they’re not open to input. To me there’s some give and take. There’s a fine line between somebody going rogue and somebody giving you really valid feedback. As you know, we’ve heard the legendary stories behind McDonald’s, several of the great ideas and many other systems that great ideas come from franchisees. You got to stay open, but you also have to respect the brand. You’ve got rules. If somebody wants to bring an idea to the table, stay open to that and don’t have the police all over them. I mean, you still got to run a good location though.
Richard Rees, Business Ventures Corp. (11:30):
You can’t run a sloppy location. Good systems are always doing spot checks. A franchisee, frankly, should look at that as not a negative, but a plus. Oh, they came in and they found something I could improve upon. Not that it was wrong. It’s like, no, it’s something you can improve upon. Again, I’ve seen franchise systems where they come in and they’re dying to find something wrong with their location or the people that they’ve hired feel so you know that that is their job. That isn’t the way you should look at it. It’s like, all right, how can we help this franchisee, and how can I maybe give some feedback to the franchisor? It’s a two-way communication.
Tom DuFore, Big Sky Franchise Team (12:09):
Yeah, no, that’s great suggestions and advice. I’ve seen similar situations where the franchisor be it never communicates with the franchisee or is looking to kind of come in with an iron fist and smash a hammer down on them. To your point, it’s let’s work together. We’re moving in the same direction there.
Richard Rees, Business Ventures Corp. (12:30):
And also to that point, Tom, if you’re a franchisor, trust me, prospective franchisees are going to make some calls. The smart ones anyway will call around because it’s in your FDD, all your current franchisees. They’re going to call around and find out the good, bad, and ugly. Don’t think that anything negative isn’t going to catch up with you.
Tom DuFore, Big Sky Franchise Team (12:52):
Prospective franchisees are hopefully calling others in the system. You certainly want them to. Those are the kinds of franchisees you want in your franchise system. They’re going to do their homework and do the extra legwork. Richard, we have four questions we ask everyone, and I’m very excited to get your feedback on these. The first question we ask every guest is, have you had a miss or two in your career and something you learned from it?
Richard Rees, Business Ventures Corp. (13:14):
Yeah, two misses, never work with family. And that’s my father and I decided, let’s do something together. Now, I know many family businesses have done well for themselves, but I would urge caution. If you’re looking to bring in a partner for your business, whether it’s a best friend or a family member, there’s some give and take. I mean, my father, thank goodness, and I survived the test, but it was just like after a year, this clearly isn’t working for either one of us. I would encourage caution beyond just family members. Before you take on a partner, be very wary of that.
Richard Rees, Business Ventures Corp. (13:56):
The second big one that I learned early is not making a change fast enough, whether that’s in personnel or in, whoa, I need to change this direction. There were several cases that, especially when it came to personnel, it took me a couple times to figure out that there was just some people in the building that weren’t working out. You’d sit down, you talk to them. After about two or three times of talking to them, it’s not getting any better. In one case in particular, when I finally let the person go, the other people in the building came to me and were like, “What took you so along?”
Richard Rees, Business Ventures Corp. (14:34):
The lesson was, if your gut is telling you, and it’s not even gut, if it’s obvious it’s not working out, whether it’s on a business structure or on somebody in your building, move with urgency. Don’t put and itself. It won’t. You’ve got to be urgent with that move.
Tom DuFore, Big Sky Franchise Team (14:52):
Well, let’s talk about a make. We’ll look at the other side. You’ve shared some already. We’ve discussed some, at least at a high level. Are there some makes personally, professionally you’d like to share?
Richard Rees, Business Ventures Corp. (15:02):
Well, really, I mean, I think the big make for me is the fact that I am happy. I think that’s real critical for any business owner. You’re in business for the right reasons. You get up in the morning and that is frankly what charges me up. I don’t have to work for anybody else. Again, that’s not for everybody. But if you’re happy, that’s when I look back and say, “Man, I’ve done well financially.” But that really wasn’t what drove me.
Richard Rees, Business Ventures Corp. (15:39):
What drove me is I wanted to do something to whether it’s introduce new music to people, introduce better healthcare to people, affordable healthcare, introduce happiness in an ice cream cone or a great food product. To me, that’s at the end of the day, I go, you know what? I’m happy. That’s my success.
Tom DuFore, Big Sky Franchise Team (16:03):
Let’s talk about a multiplier. The name of the show is Multiplier Your Success. I always love this question. We get such great responses. Have you used a multiplier in growing yourself or your businesses?
Richard Rees, Business Ventures Corp. (16:13):
Absolutely. I mean, my multiplier for me is my network of people and team. When you have a full-time business going, it’s the team you surround yourself with. But still, I have this network that I build over time. Thank goodness for LinkedIn. That has helped build that network. But I encourage all entrepreneurs and people in general to have a network that you can go to and say, “Hey, I need X, Y, Z. Do you know how to do this? Or do you have somebody that can do this or knows somebody that can do it?” For me, it’s been the network, because I’ve got a great group of people, of peers, mentors, call it what you will, that I can turn to.
Richard Rees, Business Ventures Corp. (17:05):
I’m very grateful to that network. You can’t take advantage of it. Let me make it clear. You’ve got to do it and you do it sparingly, but over time you’ll become a part of somebody else’s network and you can give feedback too as well.
Tom DuFore, Big Sky Franchise Team (17:19):
The final question we ask every guest, Richard, is what does success mean to you?
Richard Rees, Business Ventures Corp. (17:24):
Success, I mentioned it earlier, is really happiness. I’m able to provide to friends and family, but really it’s getting up and being happy. When I was starving in my early days in radio, I was still happy because I was surrounded by a high energy atmosphere, great music. Again, introducing music to people, to me that was reward. It’s really about being happy and knowing that when you leave this earth, that, hey, you didn’t burn any bridges either. To me, that’s success. I didn’t burn any bridges, didn’t screw anybody over. Everything was above board. I can leave five minutes from now and know, okay, I did good.
Tom DuFore, Big Sky Franchise Team (18:10):
Well, and as we bring this to a close, Richard, is there anything you were hoping to share or get across you haven’t had a chance to yet?
Richard Rees, Business Ventures Corp. (18:17):
I think the main thing is… Or there’s two main points. I encourage all business owners to figure out what their unique selling proposition is. You’ve heard this multiple times, and it can’t be like, “Well, I want to offer the best cookie in the world.” It’s like, well, no. What is that? Okay, what is that best cookie uniqueness that you can offer people? Find that unique thing that you can hang your hat on. And then number two, what are you really providing? Again, affordable healthcare. Well, why am I providing affordable healthcare? Because I would like somebody not to be in pain at the end of the day.
Richard Rees, Business Ventures Corp. (18:56):
Why do you want to have a great ice cream cone? Well, I want to create memories for families and they go in and, again, put in a happy place. Take a think about why you’re doing this business. It can’t just purely for money. There’s too many people out there that do things purely for money, and trust me, it’s not going to bring you happiness.
Tom DuFore, Big Sky Franchise Team (19:16):
We were talking before we went to hit record on the show. You had mentioned that you’re kind of searching or looking for potentially another investment or opportunity to get involved with. We might as well take this opportunity to see if anyone might fit what you’re looking for.
Richard Rees, Business Ventures Corp. (19:31):
Exactly. Yeah, I appreciate that. I mean, we’re really looking for a dessert concept that can scale that is also repetitive, if you will. I mean, God bless the guys at Crumbl. They’ve hit it out of the ballpark with cookies. Now you’re seeing a dozen cookie companies come up. I like the dessert space just because you can get in and out. It’s not complex, but it needs to be, again, something really unique. Unique, but also it doesn’t take forever to make. Maybe you’re on the quest for something that doesn’t exist anymore.
Richard Rees, Business Ventures Corp. (20:06):
But that’s kind of where we’re at Monarch Ventures really looking at because we’ve seen several and invested minor sums in a few that we like, but we would like to scale that at a national level to where people can go, “Hey, I can start a business.” Here’s the business in the box for you. Again, you’re bringing happiness to people. It sounds like I’m Forrest Gump. I think happiness is really key to having a good life. We’d love to find something that… Again, a great operator that knows what he doesn’t know. Some people call it coachable, some people call it other things. But going back to Dr. Fred, he knew what he didn’t know and gladly said, “Here, I know how to do chiropractic and that’s it.”
Tom DuFore, Big Sky Franchise Team (20:58):
Richard, thank you so much for a fantastic interview, and let’s go ahead and jump into today’s three key takeaways. Takeaway number one is when Richard shared with us some of the things that he thinks are important to create and build a successful franchise system. One of the things he said is that the franchisor needs to offer a franchisee a business in a box and also remember that it’s not going to be perfect. There’s a balance mixed in there. He also said it’s important to have two-way communication with the franchisee.
Tom DuFore, Big Sky Franchise Team (21:32):
From the franchisor to the franchisee, that it’s a two-way communication channel, not a one-way being forced down to the franchisee. And to remember to not view suggestions from your franchisees as finding something wrong with your system, rather it’s a way of improving. Those were great little bits of information from someone that’s had a lot of success in the franchise community. Takeaway number two is when he described what his multiplier has been throughout his career. For him, he said it has been his network of people, mentors, contacts, his greater connection base that he’s established and maintained over the years.
Tom DuFore, Big Sky Franchise Team (22:13):
He said it’s always been wonderful to be able to reach out to that network when needed. He also added another comment a little later where he said he also made sure not to burn any bridges along the way too. That certainly helps keep that network strong and keep it open. Takeaway number three came at the end of the episode right as we were about to conclude. He said that he encourages all business owners to figure out what their unique selling proposition is and to ask yourself the question, what are you really providing to your customer? You might want to ask yourself that three or four or five different times and see if you get different answers.
Tom DuFore, Big Sky Franchise Team (22:56):
And now it’s time for today’s win-win. Today’s win-win is when Richard talked about what makes him happy and that he feels happy and has happiness in what he does. I really thought that stood out. One of the things he said that makes him happy was just being his own boss, not having to work for anyone else. But I thought the real key takeaway is that he was always driven by doing something, number one, that he enjoys and, number two, in which he was helping other people.
Tom DuFore, Big Sky Franchise Team (23:37):
He said whether he was introducing new music to people, affordable healthcare through The Joint franchise, or his new opportunities pursuing the dessert business, he said money was never really the primary driver of why he did things. He was always interested and was happy doing what he was doing, and money was just a byproduct of figuring out a solution that people enjoyed. I thought that was just a great takeaway as the episode concludes and just the wisdom that Richard share. Richard, really want to thank you again for your time for our interview. That’s the episode today, folks. Please make sure you subscribe to the podcast and give us a review.
Tom DuFore, Big Sky Franchise Team (24:22):
Remember, if you or anyone you know might be ready to franchise their business or take their franchise company to the next level, please connect with us at bigskyfranchiseteam.com. Thanks for tuning in and we look forward to having you back next week.