Bennett Maxwell understood that to run a successful company he needed to know the business and be the least important person in it.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us. But we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
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Stephen Semple:
Hey, it’s Stephen Semple here, and we’ve given Dave another break. Dave Young has been getting lots of breaks lately. But he’s a hard-working guy, so it’s good that we can give him a week off. And I’m really excited. I have with me Bennett Maxwell, who’s the CEO of Dirty Dough. And I’m going to let him explain what Dirty Dough is. And in fact, I’m even going to let him explain what a CEO is, because we were talking earlier about whatever the heck that is.
Bennett Maxwell:
You can write it chairman over CEO, because we’ll probably get it in the story that I have a CEO, which is why I don’t know what the hell a chairman is because I’m like, it’s the title you get when you have a CEO and they’re like, get out of my way. Here’s a title.
Stephen Semple:
Even better. Even better. Right out of the gate, I made a mistake. But it’s not about the titles, it’s about what you’ve built. And it’s pretty cool what you guys have built and how you found yourself in the food business. Because one of the things that is remarkable about so many of the stories that I’ve come across for the Empire Builders Podcast is how many of the businesses have been started by people who are not from the industry. And you’re the same. You’re not from the food business. So tell us a little bit about the beginning, and then how you ended up stumbling into Dirty Dough.
Bennett Maxwell:
Yes. The beginning of me or the beginning of Dirty Dough?
Stephen Semple:
Beginning of you. To me, that was really interesting.
Bennett Maxwell:
Okay. Beginning of me. Raised in Utah, one of nine kids, to a single mom. And there was seven boys. So me and my brothers were always hustling to make some money, selling everything from lawn aeration door to door, to discount cards for the schools, to shaved dice. My first real job, I would say, was Cutco, which is all sales as well. Learned a ton of good referrals or referral based sales from that. I served a two-year Mormon mission in Tijuana, Mexico.
Stephen Semple:
Because Cutco, they do door to door knives, right?
Bennett Maxwell:
Not door to door, or at least not how I was trained. It’s sit down with your close friends and family, tell them that you make $15 an hour presentation or commission, whichever one’s higher. But they don’t need to buy anything. And just go get practice. And then at the end of the presentation, you say, “Okay, Stephen, whether you bought or not, who are 10 people that would be willing to listen to our presentation?” And you’re like, “Oh, yeah, I could think of them.” Like, “No, I need you to think of them right now. And now I need you to call them.” So that was a really good practice of ask for referrals, and unapologetically ask for referrals. Really good. And I think that’s led to a lot of success with Dirty Dough, which we might get into. But a two-year Mormon mission. And then I did a lot of door to door sales, pest control, satellite, direct TV led me to do solar. Started a solar company, and then that kind of led me into the Dirty Dough side, which, going from solar to cookies is a little bit of a stretch.
Stephen Semple:
Now, if I remember correctly, when we were talking, you had built the solar business up to a stage where you were able to sell that business and exit out of that business. Isn’t that correct?
Bennett Maxwell:
Yeah. Right from the get-go, I was lucky to partner with my brother who’s 13 years older than me and has been in business since, I don’t know, his early twenties he bought a franchise. So he had us sit down. And it was just me and him starting the company. We did our whole organization chart and put our heads in all of it, like what we want the organization to look like in three to five years, whatever it was. And then within a year, we were able to both replace ourselves pretty much completely out of the org chart. And then six months later, it set us up really nicely. When the time came to sell the company, it was like, oh yeah, me and my brother, we’re not really involved in the day-to-day. So it made it, I think, a lot more attractive. And I’ve tried to use that same strategy with Dirty Dough, hence the chairman title, not CEO title. I’m trying to replace myself as quickly as possible with people who’ve been there, done that and are much smarter than me.
Stephen Semple:
Right. So you’re in the solar business. You’ve sold the solar business. I’m going to assume you’ve sold it for a nice amount of money, but not so much money that you’re kicking your feet up in some sunny beach somewhere not having to ever do anything again. Or maybe you did and you just got bored. I’m not sure which. But nevertheless, you sold the business. Did you go straight from the solar business to Dirty Dough, or was there anything in between?
Bennett Maxwell:
So Dirty Dough started actually before the solar business. It was a buddy that I went to high school with. Moved to Arizona. He wanted to be the first gourmet cookie company in Arizona because he saw Crumbl and Chip and these other companies out of Utah. So in order to do that and move fast, he just started selling cookies out of his apartment. And he was selling out most nights. And then he posted on Facebook, out of all things, looking for an investor. I invested. He opened up the first storefront in 2020. And at the beginning of 2021, I’m like, “Dude, let’s franchise it. I’ll be your first franchisee.” And he said, “No, I’m actually looking to get out.” So I bought it from him when it was a single location, open for less than a year.
Stephen Semple:
Single location. And where was it again?
Bennett Maxwell:
Tempe, Arizona.
Stephen Semple:
Tempe, Arizona. Okay. All right. So he was like, “I want to do this cookie thing.” He was looking for investors. You invested. He opened it, ran it for a year. You saw the potential in franchising it. And he was like, “No, I’m out. I don’t want to do it.” And you bought him out?
Bennett Maxwell:
Yes. Because I was honestly scared that I was going to lose my investment. I’m like, “Who are you going to sell it to?” The store, it had been open maybe eight months. It wasn’t doing amazing. It wasn’t doing bad, but it wasn’t doing amazing. He didn’t have capital to keep growing. It wasn’t doing marketing. I mean, what I bought to what we have today, other than the name Dirty Dough, the colors, the logo, the branding, the recipes, the process, the branding, the messaging has all been redone. But it’s really nice that I had something to go off of in order to make those changes.
Stephen Semple:
Did he create the name Dirty Dough?
Bennett Maxwell:
Yes.
Stephen Semple:
So was it already the name Dirty Dough when you invested into it?
Bennett Maxwell:
Yes.
Stephen Semple:
All right, awesome. Awesome. Do you know why it was called Dirty Dough?
Bennett Maxwell:
Yeah. I actually had lunch with him again yesterday. Dirty Dough is just a sound catchy. But what it means today, since I’ve taken it over, a customer walks in and says, “What’s up with the name Dirty Dough?” And one of the employees at that Tempe store said, “Oh, it’s called Dirty Dough because the dough is dirty, because we focus on more mix ins.” And that’s when I’m like, oh, I like that. I want to separate myself from the competition, primarily being Crumbl, which is a plain cookie with a lot of dressing on the top. So I’m like, oh, let’s do a plain looking cookie, with all the goodies on the inside. And that led to developing the world’s first three layer cookie, which has been fun.
Stephen Semple:
Right. Okay. So what’s a three layer cookie?
Bennett Maxwell:
You could have three layers of dough or a mixture of dough slash hot fudge injection. So one of the cookies that we have is the Reese’s Reverse or something like that. It’s a peanut butter dough on the outside. And then you break it open, there’s a chocolate dough in the middle, and there’s an injection of hot fudge. So it’s already three different flavor profiles all built with special machines. And then we ship those to our franchisees. And all they do is put them into the oven to get a very one of a kind type of cookie.
Stephen Semple:
So this is cool, and we’re going to come back to this. So your buddy who wanted to be a world-famous cookie maker, did he create the idea? Had the idea already been created, of the three layer cookie, before you stepped in? No, that happened afterwards?
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
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Dave Young:
Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.
Stephen Semple:
Your buddy who wanted to be a world-famous cookie maker, did he create the idea? Had the idea already been created, of the three layer cookie, before you stepped in? No, that happened afterwards?
Bennett Maxwell:
Correct. When I stepped in, the only way that I saw this expanding was to do a centralized production model. I thought Crumbl was crushing it, and other cookie companies in the category. But they were all doing, you order your own flour, sugar, butter. So there’s no bulk discounts. You’re ordering 50 pound bags, and then you hire teenagers and college kids to make 60 cookies at a time in a mixer. And then you weigh it by hand and portion it by hand. I still don’t think that’s any way close to being sustainable. So it was, let’s do a centralized production model. And none of that existed. So the first step was, okay, we’re going to build a production unit and become a food manufacturing company. In order to do those, how are we going to make unique cookies? And I went and found the machines and started testing them out and develop that three layer cookie.
Stephen Semple:
Okay. So you’ve got one store and you decide to build this production model. And you’ve got one store. So was that store, how did you do that in terms of, was there a significant investment required into that one store? How did you do the proof of concept on that?
Bennett Maxwell:
Yeah. So for the one store, we tested the machine at the manufacturers facility and just brought dough out to them and we’re like, “Okay, this works.” And then we bought one and we threw it in that location. So we were running the process in the machine in that location, but that wasn’t the model yet. It was like, okay, does it work? That was kind of the next step. And then it’s like, okay, this machine works. It hits the numbers that we need, everything. Now let’s get a warehouse. So we got a warehouse, I think it was like 8,000 square feet, a month before we started signing on franchisees. And we’re like, out of this warehouse, we could probably produce cookies for about 30 stores. Well, within maybe three months of franchising, we’d already sold 60 stores. So it’s like, oh crap. So then we had to go get another warehouse.
But yeah, timing the growth has been really hard. And then we jumped into a 40,000 square foot warehouse because we’d sold 400 franchises. But then it’s like, we don’t have 400 franchises operating. We’re up at like 80 something. That has definitely been a big money loss learning experience. Challenge, more than anything, is trying to be like, how much in advance do we need to prepare ourselves? Especially considering, I think we were into it $2 million before we opened our first franchise and building the facility, recruiting the team, redoing branding and all of that.
Stephen Semple:
Yeah, this is a thing that a lot of people underestimate. Fast growth costs money because if you’re going to go to 80 stores really quickly, you can’t slowly build the production facility. It just doesn’t work that way. You got to build it in advance. But that’s really interesting. You very quickly went to, I think I heard the numbers, you went 60 sold. And then how many do you have sold now?
Bennett Maxwell:
450/460 some odd locations.
Stephen Semple:
450. And when did you sell the first one? How long ago did you sell the first one?
Bennett Maxwell:
December of ’21 was the month we franchised. So coming up on three years.
Stephen Semple:
So basically, three years and we’re at 450 sold. And how many open now?
Bennett Maxwell:
85 maybe. We’ve been opening up one a week for the last quite a bit.
Stephen Semple:
So you had this idea, and you had one store. So it was really just the one store would be a bit of a proof of concept. But it’s not like you had built a major brand or anything like that. How did you end up selling those first 60 franchises? Because I’m going to tell you, people I know who’ve gone out there pounding the pavement on franchises, that is no small feat. How did you end up doing that?
Bennett Maxwell:
I think it’s, as I was creating the model, I am like, okay, I have a cookie company, but it’s not what I’m going to franchise. What am I going to franchise? I went and talked probably to 100 potential people to buy a franchise. But now, I didn’t say, “Stephen, I’m thinking about franchising. Are you interested in buying a franchise?” It’s, “Hey Stephen, I’m thinking about franchising. Do you mind if I bounce some ideas and I tell you about the model that I’m creating?” And then it’s, “Okay, this is what I’m going to do. If I could ship you a frozen cookie, all you have to just put it in the oven. You can operate with one employee out of 500 square feet. Every cookie cooks for the same time temperature, fan speed. Ovens are programmed. How does that sound to you?” And then you’re like, “Oh, that sounds great. But I would like this or that.”
And then the model, as I was developing it, I was getting real-time feedback from a lot of different potential franchisees, and then was able to create probably 90% of the feedback. And then I went back to all of them and said, “Hey, I created that. Do you know of anybody or yourself that’d be interested?” And a lot of them were. And a lot of them were interested in buying multiple.
Now, I can’t discredit the timing and the luck. I mean, I don’t know what else to call it. Crumbl, I think, has been the first restaurant to open up a thousand locations from founding, in history of restaurants, and they’re a cookie company, because they were doing so well. And Crumbl’s sold out of so many different territories. Then it’s like, okay, well what else is there? And we were kind of the next option or one of the options out there. But I do think we had the most simplistic options in the space.
And I think we had the best team. Right from the get-go, I hired a CEO that had ran a company called Maui Wowi Smoothies and Coffee. She founded it in ’83, grew it to over 650 open locations. Exited. So Jill Summerhays came on as our CEO, and we had one of the founders of the largest property management franchisor in the nation on our board. And then the former CEO of Jimmy John’s on our advisory board. So it was, we’re new, but we have a really good model and a really good team.
And then we hit the market timing very luckily, which also, I don’t know if you know much about it, but we’re also in a very public lawsuit with Crumbl. They sued us before we even opened up our first franchise. And we made fun of them for it. We threw up a billboard saying, “Our cookies don’t crumble with competition. And cookies so good, we’re being sued.” And things like that. We made professional videos making fun of how stupid the lawsuit was. And we made it on CNBC and CNN and whoever else, and a lot of other local news channels, Good Morning America. And that gave us all the eyes we needed. And then the model and the team was already there.
Stephen Semple:
But instead of rolling over to it, you used it as a way of creating some real strong word of mouth. That’s amazing. So you managed to get these pretty impressive folks on board for helping you build this, which also, let’s face it, those people also help you open doors in terms of finding locations and finding people and finding suppliers and all of that. There’s no question. One of my early podcasts, one of the ladies was in the fashion industry. And one of the things that really helped her, because she had no background in fashion, was the fact that she was able to find a designer who came on board because they were bored in their job and looking for some new challenges and whatnot. And she was able to convince her to come on board and do designs for her. And frankly, for M.M.LaFleur, that opened up all sorts of doors because it’s like, “Hey, you know this famous designer? We have them designing our clothing.” “Oh, well, if she’s involved, we’ll take a meeting.” Didn’t get you the sale, but it got you a meeting you probably weren’t going to get.
Bennett Maxwell:
Yep. It’s the old bandwagon approach. It’s knocking on your door to do pest control. “Hey, do you know that Jones’s two houses down? We’re coming to spray in their house in about 40 minutes. If we can squeeze you in today or tomorrow, instead of $99, we’ll do the first one for a dollar.” It’s definitely on that bandwagon approach. And because I was in that door-to-door world using that so much, it was just so natural. Like, okay, the first hire was a former Mrs. Fields employee. And she worked at a bunch of other major brands out here in Utah.
Nobody wants to buy franchise from Bennett because Bennett doesn’t have experience. But it’s like, oh, well look at this person with all this other experience. And then I used that, the bandwagon effect of her name and experience to go recruit our first advisor, who was the best advisor I could have ever dreamed of, a guy that had a 30 billion company when it IPOed in 2002. It’s been a little bit. And then he brought in Steve Hart, who owns the largest property management franchisor. And then I was trying to get my third advisor, and I went back to that Mrs. Fields person and said, “Hey, who do you know?” She said, “Jill Summerhays. She started Maui Wowi. It’s very similar to your company. Have her be an advisor.” She connected me with her.
And then Jill’s like, “No, you need me to run this.” And I’m like, “If that’s an option, I will take it.” But every step of the way, it’s leveraging that other person’s name with that bandwagon kind of effect of, hey, this person is interested. This person believes in it. This person’s an advisor. This person’s a CEO. So there must be something here.
Stephen Semple:
Right. Interesting. So when you’re approaching people, I get part of the appeal of the franchise of this because it’s really simple to operate. And today in the restaurant space, finding things that you can operate literally with a person is pretty compelling.
Speaker 8:
Oh, no, no.
Speaker 9:
What?
Speaker 8:
I was enjoying this episode.
Speaker 9:
Don’t worry. Part two’s coming next week.
Speaker 8:
It better.
Dave Young: Thanks for listening to the podcast. Please share us. Subscribe on your favorite podcast app and leave us a big, fat, juicy five star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at empirebuildingprogram.com.
