Maximum Effort: Multi-Brand Operator puts Time to Good Use

Name: Milo Leakehe
Title: Managing Partner
Company: Imbue Capital
No. of units: 3 Crumbl Cookies, 1 PayMore Store, 1 Tropical Smoothie Cafe, 1 Rolling Suds, 1 ICX call center, 1 Solve Pest Pros
Age: 31
Family: Married, 2 children
Years in franchising: 6
Years in current position: 2

When Milo Leakehe was growing up, his father often recited mantras that he'd learned working as a child on a farm in Tonga: "Life isn't fair," "If you want something else, then work hard and go out and get it," and "If it is to be, it is up to me."

His father's family didn't always know where they would get their next meal. The elder Leakehe knew he wanted a different future, so he worked hard in school, earned a scholarship to Brigham Young University, and moved to the U.S. He later put himself through law school, eventually working as a counsel in the military's Judge Advocate General's Corps.

His father's work ethic inspired the younger Leakehe during his childhood and into his career. His first job was selling pest control door-to-door, an experience he recommends to others as a way of learning to deal with frequent rejection. After following his dad's footsteps to law school, Leakehe became intrigued by the idea of starting a holding company that owned and operated several different brands.

Leakehe partnered with Zach McKinley, and the two started franchising with Insight Pest Solutions. When they explored a franchise opportunity with Crumbl Cookies, they were rejected twice due to a lack of operating experience and available locations in their preferred territory in Utah. The partners called Crumbl three times a day for 35 days in a row to appeal the decision. Either impressed or weary, Crumbl leadership relented and approved their application. The two defied even their own expectations and were able to open three stores in six months, something Leakehe says is "probably the hardest thing I've ever done."

Today, Leakehe's holding company, Imbue Capital, operates five different brands with steady growth projected for the future.

PERSONAL

First job: Abercrombie & Fitch while in high school (14 years old) in Salt Lake City. Professionally, it was with Vantage Marketing, going door-to-door selling pest control.

Formative influences/events: My dad grew up as a poor vanilla farmer in the South Pacific and eventually immigrated to America on an academic scholarship. Much of who I am is built on some lessons my dad often repeated: "Life responds to effort," "Don't be a victim of your circumstances," "If you want something in life, go get it," and "Anything is possible with hard work and sacrifice."

Key accomplishments: Convincing my wife to marry me after trying to date her for 10 years. Graduating BYU Law School. Building and selling my first pest control business. Serving a two-year mission for the Church of Jesus Christ of Latter-Day Saints.

Next big goal: $30 million in revenue by December 31, 2032.

First turning point in your career: I took a class on mergers and acquisitions at BYU Law. A guest speaker gave a lecture about setting up a holding company to own various components of his business. At the same time, I attended a lecture on dental roll-ups. I put two and two together and realized how fun it would be to start a holding company that owned and operated various brands under the same parent company.

Best business decision: Partnering with Zach McKinley. Nothing is as valuable as having a great business partner who works as hard as you and approaches business with the same fundamental philosophy. Conversely, few things are as destructive as having the wrong partner.

Hardest lesson learned: You can't pay your bills with EBITDA. Modeling is a great skill, but you must remember your cost of capital can be the difference between being a stable, profitable business or one that is constantly bleeding money.

Work week: 2024 is the first time since 2014 that I have been able to work consistent 30 to 40-hour weeks. The last decade has been consistent weeks of more than 80 hours. That's partially because I've gotten better at delegating. Mostly, it is because the growth chasm between $2 million and $5 million is rough.

Exercise/workout: Road bike four times per week and lift weights twice a week.

Best advice you ever got: Plan your life with purpose. Be intentional about how you spend your time. Living life without goals is like getting on a boat without ever grabbing the steering wheel: Where you end up is just a function of where the wind and the waves push you.

What's your passion in business? I love the feeling of reaching a really hard goal I've chased for a really long time.

How do you balance life and work? When I'm at work, I am 100% at work. I work fast and efficiently. When I'm at home, I try to be 100% at home. It's mostly a matter of setting up boundaries between the two and fighting off people who try to intrude on those boundaries. The most valuable part of my week is the two-hour weekly planning session where I plan and calendar my entire week.

Guilty pleasure: Online chess. I'm not really that good, but it's a good way to give my brain a break from work.

Favorite book: I've been reading Simple Numbers, Straight Talk, Big Profits! by Beverly Blair Harzog and Gregory Burges Crabtree a lot lately.

Favorite movie: "Gladiator" with "The Count of Monte Cristo" a close second.

What do most people not know about you? I was mistakenly arrested by fitting the profile of a bank robber in Minnesota. Other than that, people who know me know that I am very much an open book.

Pet peeve: Inefficiency. I hate inefficiency, especially with time. Every minute of my day is tracked, so I can't identify with those who waste time. We have 24 hours in a day, so we need to spend our time wisely.

What did you want to be when you grew up? A doctor. It offered money and a job in which I could help people.

Last vacation: My family and I go on vacation to the North Shore in Hawaii each year.

Person you'd most like to have lunch with: Bill Ackman or Elon Musk.

MANAGEMENT

Business philosophy: Build great businesses by building great people.

Management method or style: Delegate and elevate. Micromanagement is inefficient. Give people a clear finish line to cross, give them all the resources they need to succeed, and then get out of their way.

Greatest challenge: Balancing profits with rapid growth. No one tells you when you start how expensive growth can be. It is hard to find the capital to grow if you can't show profitability, yet it's hard to be profitable if your goal is to grow.

How do others describe you? Someone once told me that I remind them of a golden retriever. I have an endless supply of energy and enthusiasm. I'm a lifelong learner and feel very disoriented if I don't have a crystal-clear goal. I spend two to three hours a week writing down my 20-year goals and reverse engineering the path to get to them.

Have you ever been in a mentor-mentee relationship? What did you learn? No, although that is arguably why I have gotten to where I am. I don't think I knew a single business owner growing up, and so I experienced a lot of pushback when I opened up about my goals. If I followed the advice of most of my mentors, I would probably be a doctor or a lawyer right now.

One thing you're looking to do better: I'm still trying to learn everything I can about retail marketing.

How you give your team room to innovate and experiment: One of the hardest leadership lessons to learn is being comfortable with some degree of failure. People will never learn if you hover over them and prevent them from ever making a mistake. We give our people a clear finish line they have to cross and a time they have to cross it. If they make a few mistakes along the way, we aren't worried as long as they can course correct in time to hit the goal.

How close are you to operations? I have weekly pulse calls with every operating partner who reports to me. We go over the scorecard and issue list and review our goals. I delegate much of the operations to the operating partners. My primary responsibility now is to design the systems and resources that allow our operating partners to thrive.

What are the two most important things you rely on from your franchisor? Marketing and product development. The whole point of franchising is to focus on executing a proven system with a great product.

What you need from vendors: Flexibility with payment terms. One of the bigger challenges of running a small business is managing the cash-flow cycle. It's so nice when vendors offer flexible payment terms that allow us time to convert our inventory to cash.

Have you changed your marketing strategy in response to the economy? How? No. I haven't felt the need to change. We had some concerns about consumer behavior during the pandemic. Since then, we have just followed the numbers, and the data hasn't changed.

How is social media affecting your business? Social media is one of the greatest tools available to small-to-medium business owners. The ability to reach huge audiences at low cost is an incredible tool. That is especially true with the Crumbl brand, which receives most of its recognition through social media.

How do you hire and fire? Management is easy when you have people who manage themselves. I frequently reference principles from Jim Collins' Good to Great with one of them being that great managers are good at getting the right people on the bus and the wrong people off the bus. So much of my success as a manager has been just finding really high-quality people and filtering out people who just aren't good fits.

How do you train and retain? It varies by brand. Employee turnover is high in the food industry. If you focus on quality people, they often train themselves and will stay around longer. Crumbl has a full-time area trainer who handles employee onboarding. Above all, I think you need to treat employees well to retain them. I believe in being generous and forgiving. When we have to let people go, both sides realize it needs to be done, and it is often amicable. Everyone always wants a raise, and I will try to give it to them before they ask.

How do you deal with problem employees? We have crystal-clear standards for each position. If someone is not hitting their expectations, we are very quick to communicate that and talk about what resources they need to succeed. Every now and then, we realize that circumstances have changed, and an expectation might be unreasonable. If someone is not succeeding with us after providing them all the resources they need, we are quick to have the conversation about this not being a winning relationship for either party.

Fastest way into your doghouse: Dishonesty. I can deal with mistakes, but the second someone is dishonest with me, things fall apart. I need to be able to trust people.

BOTTOM LINE

Annual revenue: $8 million.

2024 goals: We primarily focus on our 10-year goals. However, by the end of the year, we expect to open two PayMore Store locations and two Tropical Smoothie Cafe locations. We will have five brands with operating systems open by the end of the year.

Growth meter: How do you measure your growth? Our overall growth goal is 30 small-to-medium units that each average $1 million in sales. We quantify it both in terms of physical units and their average revenue.

Vision meter: Where do you want to be in five years? 10 years? Our ultimate goal is to get to $30 million in annual revenue by December 31, 2032.

Do you have brands in different segments? Why/why not? Yes. Currently, we have two QSR brands, two home services brands, one tech company, and one B2B service provider. A lot of times, I have people ask me why in the world we decided to spread ourselves over so many business segments. The most honest answer is that it is way more fun this way. Every day, I get to learn something new and learn how different businesses function. A more practical reason is that we get to cross-pollinate each business with the industry secrets we learn from the other businesses.

How is the economy in your region(s) affecting you, your employees, your customers? We saw declining revenues in Q4 of 2023 but have seen a really solid start to 2024. We were a little worried about the economy toward the end of last year, but we are very optimistic about what we're seeing in each of our locations.

Are you experiencing economic growth in your market? Yes. Spending and customer optimism are up. We are very optimistic about business moving forward.

How do changes in the economy affect the way you do business? The biggest effect we feel from macroeconomic trends is our access to capital and the cost of capital. Raising money seemed to be a lot easier a few years ago. It's still doable, but it requires a bit more legwork. Overall, I see this trend as a plus. It has forced us as operators to be better at P&L management, and it has weeded out some bad operators.

How do you forecast for your business? Primarily through modeling, although I laugh at it because it is pure speculation. We have a break-even analysis. On a monthly basis, we focus on the sales needed to keep the doors open. We are optimistic about America and the economy in general.

What are the best sources for capital expansion? Private credit is a very underrated form of capital. There are a lot of private lenders who are willing to lend without making you jump through all the hoops you see with traditional lenders.

Experience with private equity, local banks, national banks, other institutions? Why/why not? We've had a handful of private equity groups knocking at our door, but we have so far been able to avoid needing private equity. That may change one day depending on how large we want to scale. But for now, we're very happy with our growth trajectory. We are only beginning to work with some regional banks for traditional financing. Regional banks will probably become our preferred method as our businesses mature a bit.

What are you doing to take care of your employees? Few things make me happier than hearing employees say, "I will work with you for as long as you'll let me." We really try to treat our people well, give them autonomy over their area of stewardship, and be patient as they grow. Our businesses are only as good as our people are, so we try to pay generously and treat them kindly.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? This is really hard. Rising employee costs have forced us to be hyperfocused on productivity. We can't afford to have anyone on payroll who isn't producing efficiently.

What laws and regulations are affecting your business, and how are you dealing with them? Pest control is one of the most regulated industries out there. There's really no way around it other than knowing the rules and making sure you are following them. Making it work in a highly regulated industry is a pill you'll have to swallow. It can also make you better as an operator. It can be a blessing because you know what your competitors are also doing.

How do you reward/recognize top-performing employees? We have biweekly scorecards and quarterly business reviews. We also recognize top salespeople in creative ways and have a March Madness-style sales competition.

What kind of exit strategy do you have in place? We have built and sold five pest control businesses. Although I don't think we have any plans to sell any of our current businesses, the process was an incredible exercise in learning where and how value is created. The businesses fetching the highest multiples are--not coincidentally--the ones that are managed so well that the businesses aren't dependent on the owner's contributing labor. If you are trying to create the highest value business, you should focus on building a business that can run without you. If you can achieve that goal, then you have two great exit options: 1) Become a board member of your business and hire an executive to run the business in your absence, and 2) sell the business. We don't have any plans to sell any of our businesses anytime soon. We don't feel like we've succeeded until the business can run itself.