Escaping the Drift with John Gafford
From Startup to Franchise: What Actually Works with Alex Smereczniak
23 Dec 2025
Chapter 1: What is the concept of arbitrage and why is it important for entrepreneurs?
It's literally one of my favorite words in the entire world, which is arbitrage. A, because it sounds fun, but B, because of what it is. Essentially, you're taking a service or you're charging a fee, and then you're turning around and hiring somebody else to do it for less, and you're making the difference between what your customer's paying you and for what you're actually paying to do the work.
And finance, I love this because you can go borrow money at a certain rate and then you can loan it at a much higher rate, which is something I do with great frequency buying notes. And you just make the spread is essentially what you're doing. It is my opinion, the greatest thing about America is arbitrage. I love it.
So yeah, examples of it everywhere, everywhere.
It enables you to start a business without starting a business, which is great. And so many people that are good at a particular service or have a service, like you just said, might be terrible marketers. They might be terrible at driving sales. And you can go into those businesses and partner with them on these margins because they're like, what do we have to lose?
We're just here getting business, which is great. And you can take a step further, which we do. This is I do, which is very good. And I've been criticized by some for what I call it. I call it the Tony Soprano method. And now, Escaping the Drift, the show designed to get you from where you are to where you want to be.
I'm John Gafford, and I have a knack for getting extraordinary achievers to drop their secrets to help you on a path to greatness. So stop drifting along, escape the drift, and it's time to start right now. Back again, back again for another episode of, like it says in the opening, the podcast that gets you from where you are to where you want to go.
And today in studio, I got a really impressive dude, man. This is a guy that really, he went to college and rather than saying, hey, I'm going to go to college and get a degree, and then maybe I'm going to look for a job.
This is a guy that said, nope, I'm going to carve my own way, started a business in college that wound up being incredibly successful, leading it to having like 100 locations, opener in development through a franchise system, which developed a love of the franchising system. And through his...
what he perceived as a lack of clarity or a lack of understanding of the franchise deal he built a new platform called franzy which is essentially like zillow but for franchises so you can shop and understand exactly what you're getting into rather than just hearing a sales pitch at some uh trade show where they have like you know the best balloons or whatnot so uh that's what we're gonna do so guys welcome to the program we're excited today to talk and learn from alex smersnak
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Chapter 2: How did Alex Smereczniak transition from college to entrepreneurship?
You need more of a tank top look though. Yeah. Yeah. Yeah. And then I wouldn't have had a chance to use my civil war general accent, which I do appreciate, which is great. So obviously you said you're from Minnesota is where you grew up, which is ruining this whole look for me. Terrible. How did you, how did you decide to go to wake forest?
I wanted to get the hell out of six months of winter. So I was like, I need to go experience other parts of the country. I grew up in a small town, 15,000 people. It's called Red Wing. And the only reason you might've heard of it is Red Wing shoes or Red Wing boots. Have you heard? I have, of course. So like they employ 60% of the town. It's right on the Mississippi.
And I was like, I need to go somewhere else and just experience.
Well, let's, okay, let's, can we talk about that? Because that to me is an interesting dichotomy that a lot of people get caught in, in these smaller towns. I tell a story about like when I lived in Detroit in the late nineties, I was a transplant from Florida, Detroit. Try that. That did not. Yeah. My company moved me there. It was terrible.
But what I found was it was a very difficult place to make friends because there was this hamster wheel of like, I'm born. I go to high school. I graduate high school. I get a job next to my dad at the Ford plant. I marry my high school girlfriend and I buy a house, three houses down from my parents, wash, rinse, repeat. That's what it is. Yeah, but it just wash, rinse, repeat.
Every generation just repeats what the previous generation did. And it's really hard when you're in that kind of an echo chamber to kind of see what's possible out in the world. If you're in a town where this company employed 60% of the people, is that kind of how it was where you grew up?
Yeah, I mean, a bunch of my high school friends are still there. And if they're not in Red Wing, they're in Minnesota still. So my parents are still there. That's where my mom grew up. Were your parents working at Red Wing? My dad was a financial advisor. Okay. But my mom grew up there, went to high school there, stayed there. I was born there, went to high school there.
And so it was exactly what you just described. Most people stay there.
So was it, was it you or the fact that your dad was a financial advisor that you saw bigger and wanted to not just go work?
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Chapter 3: What lessons did Alex learn from starting a laundry business in college?
Like my mom says roots and wings. She's like, I help you get grounded and be a good person, but then I want you to get wings and go fly and go do something else. Like don't stay here. Yeah. Um, you know, she would love to have me back and be closer. We have my wife and I have a five month old. Um, You'll get her sooner or later. How old are your parents? My dad's 74. My mom's 71.
And they're not doing the move to the closest grandchild thing? Well, so I have two older brothers, and they're back in Minnesota.
So I'm the odd duck out. Oh. Yeah, see, my mom did the move to the youngest grandchild thing.
She calls me her baby boy, so maybe she'll still come on down.
All you got to say is this is so hard. We don't have enough help. We just don't have enough help. Can you help us? She'll show up. She'll show up. So, but, but your parents were good examples, wanted you to get out of the house and do things. Yep.
What advice would you give to like, okay, if you could go back right now to your high school friends and granted, if you're a high school person working at Red Wing, we're not hating on you at all. I'm just trying to say, if you could go back and talk to those people at their formidable ages and say like, maybe there's more, what message would you give them?
I would tell, I mean, go travel. It doesn't have to be expensive. Just go see other cities, other states, what the culture is like there. What else is out there? Because our parents being really intentional about a summer trip or a spring break trip that wasn't to the cabin in northern Wisconsin that looks like more of Minnesota. So they were very good about...
know experiences experiencing other cultures places things and that really opened my eyes to there is way more out here and i tell those folks like don't take the trip to wisconsin dells to the indoor water park like get in the car and drive to austin texas orlando or wherever it is to go just see other parts of the country
Yeah, one of my favorite things that's ever been said in this podcast room was my friend Chris Connell once said, I never met a well-traveled racist. I love that quote. I thought it was so apropos. And we've worked to get our kids out of just saying one thing over and over and over again.
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Chapter 4: How did Alex scale his laundry business after college?
Okay, there it was.
To hell with Duke. Screw you, Mike Krzyzewski, whatever. Oh, yeah, screw you. I'm not doing it, buddy. Okay. I love how you knew. I had to ask.
I don't know.
Well, you said I want to go a place in the South with great basketball and you went to wake forest.
Yep. I had Villanova Vanderbilt. I wanted smaller too. It's like, Duke, check that box. Wait. Cause I don't know, going from a town of 15,000 people to a school of 15,000 kids felt terrifying.
Dude, how are you going to go to Vanderbilt? It's right in the middle of Nashville.
Yeah.
That would have been, I mean, it would have been awesome. Don't get me wrong. My kids applying to Van, which one of the schools he's applying to right now is Vandy. So yeah, it would have been awesome.
It was like, oh, basketball, I can get over the size. I wasn't like terrified of big cities, but I was like, no New York, no Chicago. I just, I couldn't.
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Chapter 5: What challenges did Alex face while franchising his laundry business?
My graduating class was 104 of us, and I think 70-some went Division I in hockey or soccer. Wow. I was not one of them.
You were not one of them. I wasn't one of them either.
Yeah. So I did well in school, and I was going to let the college I got into dictate what I did because I was really interested in going into the medical field, pre-med, but I also was very interested in business. My dad, growing up, worked with a lot of entrepreneurs. He was entrepreneurial himself. I was like, all right, if I get into Duke, I'm going pre-med.
And if I get into Wake, because those were the top two I'd narrowed it down to. Wake has a top 10 undergrad business program. All right, if I get into Wake, I'm going business. If I get into Duke, I'm going pre-med. So if I didn't get waitlisted, I probably wouldn't be sitting here right now.
You'd be a doctor. Okay, come on. You wouldn't have as much money probably, but yeah, depending on what kind of doctor you would.
I want to do radiology and they're getting cooked right now. Yeah, that'd be bad. Reading charts.
Yeah, if you're going to be a doctor, just go right to plastic surgery and just move to Beverly Hills. Just do that. You work with my buddy, Dr. Jay Calvert there and there you go. That's all you need to do. So when you were in a wig, did you, were you in a position where you didn't have to work or, or what was your, what was your financial situation?
Yeah. My parents were like, no tattoos, no piercings. If you do that, whatever school you get into will help financially and, um, take care of you guys. Good move. Um, and a few other rules and things growing up, but, um, So I thankfully didn't have to work, but my dad was like, I worked three jobs and walked uphill both ways. So he wanted us to have a job.
He's like, you don't need to do it, but you need to have something where you're making money for your own. You can't do nothing. Yeah, you can't do nothing. And so I worked for this student-run laundry business called Wake Wash as a bag runner initially. I was running in, grabbing people's dirty clothes, putting them in my 2006 Jeep Liberty and driving them off campus to the laundromats.
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Chapter 6: How did Alex pivot to create Franzy and what is its purpose?
This is, this is gold. What are you saying right now? Because so many people want to bring on a partner when they start a business, a cause they're chicken shit to do it themselves. B cause they just think it'll be fun with their friends. But most of your friends are replications of you. And if you have three people that are all,
putting input into a business and they all think the same way, two of them are not necessary. So what did you bring to the table? What was your, like, let's talk about the SOPs. Let's talk about what you, what your areas of responsibilities were. What did you bring to the table? What did they bring to the table?
Mine was like the finance strategy, putting the deal together. And then like big partnership sales type of, type of things. My other partner was also financed entrepreneurial. Those dad was an entrepreneur. One was really good at marketing. And then one was an anthropology major. Perfect. Because that's what you need in this business.
That's exactly what you need.
He's the one that didn't make it out with us. Really? That's shocking to me.
How does this affect ancient cultures? I'm not sure. Let's talk about it.
The four of us are all really good friends. We just realized we don't need four of us.
I can just see those meetings when you're like, here's my input. Yeah, that's really cool. Here's my input. Yeah, that's really cool. Here's my input. Yeah, that's really cool. The third person's like, should we get pizza?
Lots of drinks for has.
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Chapter 7: What role does AI play in Franzy's business model?
Times revenue.
Yep.
Okay.
All right. So one and a half times revenue. Service business. Okay. It's fair. And you said you did seller financing. What were the terms on the financing?
So we did 11 grand down and then we ended up paying them a percentage of revenue over the following two years that we ran it.
Okay. For a total purchase price of the 28 G's. Did you stick on that? They just were like, it's going to be 28 grand. Yep. Okay. So 28 grand.
They wanted to uncap it, but we knew, and we did do what we were, what I'm about to say is we were going to get a really formal relationship with the university where we were getting real estate on the incoming, you know, parents website, booth at orientation. And we ended up eight X in revenue. Or had we,
uncapped it yeah they're not capped it uh they would have gotten a really really good outcome so thankfully we capped he said hey you're looking for 28 or so we capped it i think it was maybe 30 31. yeah low 30s well okay let's well lessons learned from that little transaction is is you've got a distressed seller they're graduating the business either gets sold or it dies yep were there other suitors at all for this
There was one other one in there.
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Chapter 8: What advice does Alex have for aspiring entrepreneurs?
Um, so I ended up owning a little bit more, uh, cause I was, I was effectively running it the following years, uh, put the deal together, structured it.
Okay. So, okay. Let's talk about this. Cause now this is interesting. Did you value your time with your partners once the deal got moving? So did you start taking a salary?
It didn't take a salary. We were paying ourselves dividends and we paid it out based on the total percent of ownership that we'd agreed to, based on capital putting in and time that you were going to be working on.
If you could have gone back and revised that,
Would you not?
No, this is okay. Remove yourself from your buddies and remove yourself from the situation, right? I'm just, we're trying to help somebody else is what we're doing right now. We're not trying to, I'm not trying to hammer you down what it could have, should have wrote. I'm saying let's help the next, the next people. Cause I think this is something that people don't, don't do right here.
And you get into it with the best intention with people. especially partners. Everybody's day one, everybody's best intentioned. Oh my God. I'm totally going to, yes, I can put forth effort. I'm going to do this. Yes. I'm gonna do this. And then life happens. Right. Maybe all of a sudden they start not doing so on school and they were like, shit, I got to study. I can't do this.
Maybe they get married randomly at 20 years old and have a kid. Oh shit. I got that. Like things happened pretty rapidly with people, uh, And you don't realize that. So was there a mechanism within your partnership agreement to adjust that or to compensate for that?
No, in hindsight, I mean, we were, I think, looking on Google or like, I don't even know if the, I can't remember if the university, one of the finance professors gave us a template or something, but it was very basic. I think our math was like, all right, I'm willing to work 10 hours a week. I'm willing to work five.
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