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Introduction to Logistics: Expo Session — Transcript

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0:00Welcome to industry insights with Route
0:01[music] Consultant, your front row seat
0:03to the fast-moving world of logistics
0:05and beyond. Each week, we bring you
0:08gamechanging insights, real world
0:10strategies, and fresh perspectives to
0:12fuel smarter investments and build
0:15stronger [music] businesses. Join us as
0:17we sit down with expert guests to
0:19explore emerging trends and pressing
0:21topics across a wide [music] range of
0:23industries. This is Industry Insights.
0:30Hey everyone, welcome to Industry
0:32Insights. This is a special episode that
0:34was actually recorded live at the Route
0:36Consultant Expo in 2026. We're releasing
0:38this over time so that if you weren't at
0:40the expo or if you missed the session or
0:42if you're just catching up, these are
0:44all coming out over the course of the
0:46year so that you can go back and watch
0:47this content and make sure that you see
0:49everything that we went over at the
0:50expo. Today, you'll be hearing from me,
0:52Josh Gregory, about getting started in
0:54the logistics space. I guess just
0:57briefly about me for those of you who
0:59haven't met me. Uh this is my
1:02sixth expo with Route Consultant. So I
1:04only missed one. Um but the first one
1:06was actually here about 7 years ago or 8
1:09years ago now. Um and so it's kind of
1:12fun to come back full circle. We've been
1:13on a a tour. We went to Vegas for a
1:15couple of years, Dallas for a year, but
1:16we're back. Um, I have been in a bunch
1:19of different roles at Route Consultant,
1:21but where you see me now is all of our
1:23content, our education, things like
1:26this, the the stuff that we put out
1:27online is my team and also me. A lot of
1:31the times they when they need somebody
1:33to stand in front of a camera, they
1:35force me to. So, that's kind of the the
1:36place I've evolved into uh over my time
1:39here. But, really, a lot of what I do is
1:41for current contractors who've been in
1:42the space for a while. Myself and my
1:45team really work to help them find ways
1:46to be more financially successful, more
1:49profitable. And for those who are
1:51looking to get into the space for the
1:53first time, whatever that space may be,
1:55we really want to help you go in eyes
1:56wide open to know what you're buying, if
1:59you're paying the right price, and then
2:00how to be successful once you get into
2:02it. So, that's a little bit of what I am
2:04and what my team does and a little bit
2:06of what this session is about. Uh really
2:09it's for those of you who are brand new
2:11trying to figure out how to find the
2:14right place to spend your next year, 5
2:16years, 10 years, 20 years as you get
2:18into one of these industries and make
2:20sure that the one you choose is the
2:22right industry and also that you pay the
2:24right price for whichever one you decide
2:26to get into. Uh a lot of what we do here
2:29is make sure that there's as little
2:31regret as possible. So um thank you for
2:34coming to the expo. I I would say that
2:36one of the hardest things to do is take
2:38the first step. You know, there's a lot
2:40of things you can do online. There's a
2:41lot of learnings you can do and coming
2:44to the expo is a way for you to
2:45physically step out and really commit
2:48yourself to one of these paths. So,
2:50again, I I applaud you for being here
2:52and for being at the first session uh to
2:54get the most out of this weekend. So,
2:57like I said, um I'll go over a little
2:59bit about what the expo is later, but
3:01the way that I'm going to start is by
3:03going over each of the main industries
3:05that you can see here so that you can
3:07start to kind of decide which are the
3:08right fits for you as you're deciding
3:11which sessions you want to go to
3:12throughout the weekend. But I would also
3:14encourage you not to lock in on one and
3:16only go to sessions for that. This is a
3:18really good time for you to open your
3:20mind, see a bunch of different
3:21opportunities, try to talk with
3:23contractors from a bunch of different
3:25industries and and really find the right
3:26fit for you over the course of these
3:27next couple of days. Uh, and hopefully
3:29have some fun. Uh, we do intend to have
3:32a lot of fun things going on. If you saw
3:33the racetrack out there up front,
3:35hopefully you'll get a time to go out
3:37there and and set a high score. Um, so I
3:40will start with FedEx. Uh, and when I
3:44say FedEx, it's really two different
3:45industries there. There's two pieces of
3:47this pie where you're working with the
3:49same customer, but really the industry
3:52is two different components and you
3:54should think of them as that. They're
3:56not the exact same skill requirements.
3:57They're not going to require the same
3:59thing of you as an owner, but also of
4:01your employees and the assets that
4:02you'll need for each of them. So, I do
4:04want you to kind of think about them and
4:05evaluate them separately. And you will
4:06see sessions focused on one or the
4:09other. And let me make sure that I don't
4:11talk too much about one thing and stay
4:13on time. Um, so the first one is FedEx
4:15PND. Uh, and when I say PND pickup and
4:17delivery is when you think about FedEx,
4:20it is the FedEx you think about most
4:22often. The FedEx trucks that are
4:23delivering to your house that are, you
4:26know, just delivering those normal
4:28packages to your house. And if you
4:30haven't seen before, if you haven't gone
4:31to look for it, those FedEx PND trucks
4:33on the front door will say the name of
4:36the company that actually owns them. So,
4:37it'll say FedEx on the side, but it does
4:39say the name of the company. So you now
4:40now you'll know to start look and see
4:42who's delivering to your house and which
4:44company is in your area. But in the P&D
4:47space, you do own zip codes. So you will
4:50have a contract that'll dictate a set of
4:53zip codes where all packages in those
4:55zip codes are yours. Any of those that
4:57come through the FedEx network are yours
4:59to deliver. Any pickup in that network
5:01in those areas are yours to pick up and
5:03bring back to the terminal. So you do
5:05own the rights to every single package
5:07in those areas. The way it works from a
5:10day-to-day perspective is that your
5:12drivers will show up at a FedEx terminal
5:14where the trucks are left overnight. So,
5:16you don't even have to bring the trucks.
5:17They'd stay at the FedEx terminal. Your
5:19drivers show up. A lot of times those
5:21trucks are already loaded with the
5:23packages for the day. Sometimes your
5:25drivers might have to load them
5:26themselves, but from there you will go
5:28out to a predetermined route through
5:30whichever technology you use, and there
5:31are plenty of those technology vendors
5:33out here today to talk to. Um, but you
5:35will go out and deliver through all of
5:37your zip codes for the day, bring those
5:39trucks back to the terminal and leave
5:41them there for the day. So again,
5:44assetwise,
5:45you leave everything at the terminal.
5:47You drivers just show up, pick up the
5:48packages, go out and deliver for the
5:50day. Now, when you're thinking about how
5:53this territory, this business actually
5:56works, FedEx pays through a contract
5:59that is typically renewed annually is
6:01the way those are structured. And
6:03there's a couple of different rates that
6:05go into those contracts. So they pay per
6:07package per stop rates. They also pay a
6:11flat fee, a service charge. It's just
6:13the same thing paid every week. You can
6:15think of it as a salary that you get no
6:16matter what. So you've got those
6:18variable charges of the per package per
6:20stop rates. You got the the flat
6:22guaranteed fees and you're paid the same
6:24every week. So FedEx does pay weekly.
6:26It's one of the best things about this
6:28space. One of the best things about
6:29working at Route Consultant is that we
6:31started in the FedEx industry. So, I am
6:32also paid weekly. Um, but it is it is
6:35something to be expecting when you get
6:37into the space that you're paid weekly
6:38by FedEx. And typically drivers are also
6:41expected to be paid weekly. So, go ahead
6:43and and get into it. If you have drivers
6:45that are paid by weekly, do not change
6:47it. Leave it. That's great. But you
6:49should expect that a lot of these
6:50drivers are paid weekly in the same way
6:52that FedEx pays you weekly.
6:54So, um, we can get into negotiations and
6:57a little bit of what contract renewals
6:59look like if anyone has questions on it
7:01later, but from a base level, that's the
7:03way the contract looks for FedEx PND.
7:06So, as I said before, you own the
7:09contract and those zip codes. And so,
7:11the way growth works is there's organic
7:14growth that happens where any package or
7:16any any apartment complex or house
7:19that's built in your zip codes, that's
7:21additional volume that comes your way.
7:23Uh, also if there are times of year
7:25where more people are ordering more
7:26packages, like peak season that we just
7:28came off of, where everyone orders more
7:30packages for Christmas, that is
7:31additional organic volume that comes at
7:34the end of the year every year. That's
7:36just organic. You don't do anything for
7:37it. The big thing with FedEx and several
7:41of these industries we'll talk about
7:42that's really important is that you do
7:44not control the revenue. You don't
7:46control the topline. They, you know,
7:49they have sales people that go out and
7:50get all the packages in your territory.
7:52So, your ability to be successful, your
7:54ability to be profitable is directly
7:57tied to how well you can control your
7:59expenses and how efficiently you can
8:02operate those businesses. Um, you're not
8:05controlling the top line, which is a pro
8:07for a lot of people. You don't have
8:08sales, you don't have marketing, but
8:10there is that kind of side of the equ uh
8:12equation where you're not really doing
8:13much to change that pie, that revenue
8:16pie at the top line that you're dealing
8:17with.
8:18Uh so the other way that there's growth
8:20with FedEx is you can always of course
8:24buy additional territories. They do not
8:26cap you until you get to a certain
8:28point. So the way that they control the
8:32size of your business, the maximum size
8:34of your business is at each terminal
8:38they will set a scale limit. So they'll
8:40say the biggest you can be is x% of the
8:44terminal. you know, 25% of the terminal.
8:46That's the most volume that can come
8:48through you.
8:50It makes sense why they do it. It's just
8:52a risk analysis. They don't want
8:53somebody who controls 80% of the
8:55terminal where if they fail, the entire
8:57terminal fails. Now, that scale limit
9:00only applies at the terminal. So, you
9:02could be at scale at every terminal in
9:05the country and often the next terminal
9:07is only an hour at most away. So,
9:11there's a lot of potential growth within
9:13a terminal as long as you're not at the
9:14scale limit. And then there's also
9:16additional growth that can happen
9:17outside of the terminal.
9:20Um, the only other way that you may pick
9:24up additional volume is if there's
9:26anyone struggling at a terminal you're
9:27already at or if you're a member of
9:30certain contingency networks, there are
9:32ways where you can pick up volume from
9:34other struggling contractors and kind of
9:35think about as additional way to add
9:37growth.
9:38Um, those are the main things to think
9:41about when it comes to P&D. From a price
9:44and profitability perspective,
9:46there's a wide range of actual prices
9:48that we see these businesses go for. I'd
9:50say they average around 750,000 to a
9:53million as a as a purchase price. Uh, we
9:56typically see profitability ranges
9:58between about 10 and 20%. Uh, the
10:01average is probably closer to 17 or 18
10:03right now.
10:05they there's plenty of reasons why it
10:07can be one on one end or the other
10:08typically like I said tied to how
10:10operationally effective those owners
10:11are. Uh the average multiple is still
10:14about a four multiple in the P&D space
10:16as well. So what that means if you
10:18haven't heard of it uh four times net
10:20operating income so if your net
10:23operating income for your business was
10:24$100,000 a four multiple would be a
10:27price of $400,000. And so the average
10:30P&D business goes at about a four
10:31multiple of the net operating income. So
10:35P&D wise, are there any questions before
10:39I go on to the second piece of the FedEx
10:41equation?
10:45Yes. And we've got a mic runner that
10:47needs to get up and running.
10:51It's okay. I I snuck that up on you.
10:56Morning.
11:00So other than buying an existing ride,
11:02Yep.
11:03>> how do you get into the FedEx space
11:06organic?
11:07>> Yep. So there's a couple of ways. One of
11:10the ways that FedEx provides is
11:13something called build a ground biz.
11:17So basically what happens is FedEx will
11:19sometimes post free uh build a ground
11:21biz. It's a it's a FedEx website. That's
11:24like the actual URL. Um, FedEx will post
11:27free routes, both P&D and linehal on
11:31that website. It's really important to
11:33understand what you're getting and what
11:35you're not getting. So, if you go for
11:37one of those, typically they aren't
11:38going to have much history on what you
11:41can expect from that territory
11:42previously. There's no trucks included.
11:44There's no drivers included. And so it's
11:46really you intend to you already have
11:49all the resources, know how to get them
11:50and are bringing that to the table
11:52because a really important thing with
11:54FedEx is once you start up on the
11:55business, they aren't saying, you know,
11:58here's your like 9month ramp time.
12:00They're expecting you on day one to
12:02really be able to be up and running and
12:04successful in the same way that any
12:05contractor who's previously run that has
12:07been successful. So build ground biz PND
12:10can be good opportunities if you know
12:13what you're walking into and you have
12:14the resources for it, but it can also be
12:16really dangerous. The the challenge with
12:18a territory that
12:21could be challenging that you could lose
12:23it is that is currently your only
12:25reputation with FedEx. And so if you
12:27come in and immediately have a poor
12:30relationship with FedEx and maybe can't
12:32even start up successfully, that is your
12:34black spot and it might be hard to get a
12:36second one. I will say I know when we
12:40when we grew and I know plenty of people
12:42who did similarly, builder ground Biz
12:43was a great place to add territory once
12:45we gotten into the space and knew what
12:46we were doing. Um because it's just
12:49often a very cheap way to grow. Uh, but
12:52I I generally say that it's very
12:54difficult to be successful if you don't
12:57have any resources or previous knowledge
12:59of how to run a similar type of company
13:01or a FedEx company to go through build a
13:03ground viz and and it's often
13:04challenging even to get approved because
13:06like I said they expect you to be able
13:08to be up and running immediately.
13:13Any other on the P&D side?
13:16Congratulations though. You broke the
13:17seal for the first question. So I
13:19appreciate that.
13:21Um, okay. So, next category is lineal.
13:26So, this is the other side of the FedEx
13:29coin. It's the one that I think the most
13:31people are naturally afraid of because
13:34like I said, FedEx PND feels familiar.
13:36You see those trucks all the time. You
13:37kind of know what it looks like. Even if
13:39they're bigger trucks than you would
13:40drive comfortably, they're still a lot
13:42closer to a normalized vehicle than what
13:44you see on the line side, which most of
13:46us are not don't have our CDL, haven't
13:49been in a CDL, don't have family members
13:51that are CDL drivers. And so it just
13:53naturally feels significantly more
13:55foreign than the average P&D business.
13:58Uh when we got into FedEx, we did P&D
14:01for a long time before we ever even
14:03looked at Lime Hall. And if there's
14:05anything we could have done earlier,
14:07it's add on lineh hall to our business
14:09significantly sooner. Uh I know plenty
14:11of people who've done P&D and linehaul
14:14who started with one and added the other
14:15and vice versa. So importantly, I do
14:19want you to understand that these are
14:20two different businesses. But part of
14:22what I want to talk about today is to
14:24not automatically eliminate one or the
14:26other and really try to find
14:28selfidentify where you fit best and
14:30which one is the right fit for you over
14:31the course of these next two days
14:32because they're both very attractive.
14:34But like I said, line hall can be
14:36something that you just ride off because
14:38it feels too large, too scary. It can
14:42be. There are when I think about line
14:44hall in general,
14:46uh the way we the thing we often say is
14:48that it's 90% boredom, 10% terror. Uh
14:52I'll go into a little bit more of what
14:53that is, but basically a lot of what
14:55you're doing in line is pretty, you
14:57know, simple and standard in terms of
14:59what your drivers are doing today. It
15:00looks very similar day-to-day, but when
15:02there is a problem, it's big. It's never
15:05a small problem with these vehicles. So,
15:08um, the way to think about line and the
15:09FedEx network is you're basically the
15:11the mules of the FedEx network finger
15:15terminal to terminal. They load up those
15:17tractor trailers and they move them, you
15:19know, from Memphis all the way over to
15:21California. So, that's the way that
15:23these are typically moved. The packages
15:25are moved throughout the network. Your
15:27drivers can be be on a variety of
15:30different kinds of runs. There are
15:32overnight runs. There are some that are
15:34uh back the same day and then there are
15:36some that are very low mileage. We'll go
15:38into what each of them are in in just a
15:40second, but line hall is typically going
15:42to have your CDL drivers going out for
15:44the day and maybe not much at all
15:47happens over the course of the day.
15:48These are guys who are doing the same
15:51thing, very used to doing the same thing
15:52and are professional drivers and their
15:55dayto-day may be pretty simple. Um,
15:58basically the typical average run, you
16:00know, you're showing up at 7:00 p.m. at
16:03at a FedEx terminal, picking up your
16:05load, driving 6 hours, dropping it off
16:08where you want to go, and then they you
16:10get a load back from FedEx. So they as
16:13long as you're on one of the FedEx
16:14network runs, they also provide the the
16:17load on the way back. There's there's
16:19caveats to that, but generally it is a
16:21pretty uh set in stone way for you to
16:24get there and back. And the way FedEx
16:26pays is just per mile. So there's a
16:28couple of different rates built into
16:31that. But they pay a per mile rate. They
16:33also pay a per mile rate for fuel. And
16:35there's a couple of additional charges
16:37that they pay as well depending on what
16:38part of the country you're operating in.
16:40But as for PND, there's actual contracts
16:43that renew annually and they're at a per
16:46customer level negotiation. Lionel's
16:49done regionally. So they they roll out
16:51the same rates across the country in
16:53certain parts of the country. So you
16:54don't negotiate, they just happen. They
16:56roll out and you typically are going to
16:58see an increase in rates every
17:00September. There's nothing you get to
17:02say, but every year for 10, 15 years
17:05now, it's been an increase in rates. So
17:08that could change in the future, but for
17:09now that's the way line hall works is
17:11they just increase your rates every
17:12year. Nice to know, but it's also nice
17:15to know you don't really have to worry
17:16about the negotiation side like you
17:17might on the P&D side.
17:20Now, when I said there are when there
17:22are problems, they're bigger. Uh, a
17:24couple of ways to think about it. Uh,
17:26like I said, in line you have
17:28professional drivers. They're CDL
17:30drivers. They are generally paid at a
17:32higher rate. Um, they're also a little
17:34bit harder to find than the average P&D
17:36driver because of the qualifications
17:37needed. We are in a better hiring market
17:40than I would say, you know, two years
17:42ago was significantly harder than it is
17:44right now. But even still, this is a
17:47different type of hire than what you
17:48have for PND.
17:50The important thing, too, with those
17:51drivers is lineal. Like I said, you're
17:53only paid per mile. There's none of the
17:55flat guaranteed salary I talked about
17:57with FedEx PND. So if you have a driver
18:00that doesn't show up or quits and you
18:02don't have a way to have that run go
18:03out, you don't get paid anything either.
18:05It's a feast or famine model. So it's
18:07really important in line hall to always
18:09be recruiting and always make sure you
18:11have some way to keep that truck on the
18:13roads that you'll get paid. So that's
18:16why I said if a driver calls out, it's
18:18not a just a I'll figure out today. It
18:20can be a pretty significant hit to your
18:22revenue until you get that solved. Same
18:24for trucks. Uh those are not, you know,
18:27the average line hall truck, especially
18:29if you're talking the over the road
18:30trucks can be as high as $180, $190,000
18:34right now if you're buying new. And if
18:37one of those goes down, again, it's
18:39always a headache. It's really important
18:41in this space to have strategies and
18:43contingency plans. And there are all
18:44kinds of ways to think about that. There
18:46are vendors on the leasing side to give
18:47you those options. There are warranties,
18:49there are tow truck, there's all
18:50different types of strategies. And we do
18:52have a fleet strategy session later. I'm
18:54not going to try to go into all of that
18:56right now, but there are ways to
18:57mitigate it, but at the same time, like
18:59I said, those problems are never small
19:00when they happen. So, a lot of what
19:02you're doing, I mean, you should be
19:03doing this in any space, but a lot of
19:04what you're doing in line as well since
19:06there are fewer assets on the road is
19:08you're really just trying to think about
19:09contingency planning. If something does
19:11go wrong, what's my plan A, my plan B,
19:13my plan C, so that I can make sure that
19:15I continue to have those trucks on the
19:17road since that's the only way you're
19:18generating any revenue.
19:21Um, so I talked about scale with FedEx
19:24PND. It's a little bit different with
19:25linehaul. They basically set limits on
19:28the total number of trucks you can have
19:29in the network. They also look at it at
19:31a district level. I will say it is very,
19:34very difficult for the average size
19:36contractor to ever worry about scale.
19:39The way they have it set up right now,
19:40you would have to be, you know, 60 70
19:43trucks before you're even thinking about
19:44it. And that's not really something
19:46you're gonna have to worry about for
19:48most line hall contractors for a while.
19:51So questions on line.
19:56Get them cam.
20:02Good afternoon. Dylan dollar two lanes
20:04transport. Um, when it comes to rates
20:08for linehaul, if you don't mind sharing,
20:11what are your what percentage of the
20:14line hall rate is the driver getting?
20:17Let's say owner operator and company
20:20driver.
20:22>> I
20:24it'd be tough for me to have that number
20:26off the top of my head. I would ask one
20:29of the sessions later has uh a couple
20:31line hall guys that would be able to
20:32answer that. Um
20:35it there I honestly I don't know the
20:38exact percentage off the top of my head.
20:39So I'm not going to I'm not going to
20:40throw a number out and lie to you. Uh I
20:42I would say there's a couple of guys in
20:44some sessions later. I'm not going to
20:45try to just throw one out. Uh it is a
20:47pretty high percentage though of that
20:49that goes to the drivers. Almost every
20:51driver in line is also at least in the
20:53FedEx space are paid per mile. So it is
20:55directly correlated to that number.
20:57That's the way that uh most contractors
20:59think about it. But as for that exact
21:01percentage, I I don't know off top of my
21:03head.
21:03>> Okay.
21:03>> And it it does vary per region, too, the
21:05way that the rates are structured and
21:07how competitive your market is, how much
21:08you might have to give to that driver to
21:11be able to, you know, there's some areas
21:13where you have to give a lot more to
21:14your average driver than others. Yeah.
21:16>> All right. I appreciate it.
21:17>> Yeah.
21:23>> Good afternoon. My name is Brandon,
21:24Houston, Texas. Um, typically how many
21:27vehicles does every does a contractor
21:29have in line hall?
21:31>> Yeah, and I guess I didn't touch on
21:33average margins and percentages. Uh,
21:35finances on the line hall side, too. Um,
21:37I would say an average contractor is
21:40significantly smaller in terms of trucks
21:43on the uh comparing P& line, most people
21:46are like 3 to five range. Um, there are
21:48several that are much larger than that,
21:51but I'd say the average contractor is
21:53smaller. And one of the important things
21:54to understand, I don't have time to go
21:56into the full run acquisition model for
21:59Lion Hall, but there is not the same
22:02growth pressure on Linhall as there is
22:04on PND. So PND I talked about how if
22:06they build six apartment buildings or if
22:09they build, you know, or if there's just
22:11ordering tons more packages, that is
22:13your volume, which is great, but it also
22:15means that you have to keep up with it.
22:16You have to be prepared for that growth
22:18because you can't turn it down. It is
22:20yours and you have to deliver it. line
22:22you own runs. So you own dedicated lanes
22:25or you own varying lanes that happen at
22:27certain times of the day across the
22:29country. And so if there's more growth
22:31at the terminal, it's not automatically
22:33yours. What that also means though is if
22:36there's more growth at the terminal, you
22:38don't have to grow. And so there's a lot
22:40of lineal guys that are in that 3 to
22:42five range and have no intention of ever
22:45growing beyond that. They're very happy
22:47at that range. They don't want to be
22:48larger. That's the range that they can
22:49comfortably run. What that also means
22:52though is that with P&D growth pressure,
22:54you have people who get larger than they
22:56want to be and they either sell their
22:57whole business or a piece of it because
22:58it's too large. With lineal, you don't
23:00have as much of that. So there's a lot
23:02fewer linehaul runs that ever go for
23:04sale because there's a lot fewer
23:06linehaul guys that are forced to sell
23:09because they've gotten larger than they
23:10can handle. Um, from a margins and
23:13financials perspective though, I'd say
23:15the average line business is going to be
23:16a little bit higher margin. I'd say
23:18closer to 15 to 25%. Uh we see larger,
23:21but the when you get up above 25, it's
23:24typically those runs that are running
23:26significant numbers of miles across the
23:28road, the team runs where there's
23:30multiple days out on the road. So, we
23:31can't see that higher. Um average
23:34multiple is still about a four multiple,
23:35similar to P&D. Um but the average price
23:38is going to be closer to a million or
23:40more. Again, we see smaller price or
23:43smaller size businesses, but when we're
23:45talking averages,
23:47um, but yeah, 3 to five is what I would
23:48say the the pretty typical average is
23:51for Lion Hall.
23:54Ron,
24:00>> it's coming. Yeah,
24:04>> good afternoon. Um, so you mentioned
24:06that there's an annual rate increase.
24:08What's the annual rate tied to?
24:10>> It's something FedEx calculate. They
24:12don't even tell you exactly what goes
24:13into the exact re rationale for it, but
24:15it's going to be somewhere between 2 to
24:184% based on what they think are the
24:21market conditions and the rates that
24:23need to increase. Maybe there's been
24:25higher payroll pressure this year. Maybe
24:27truck prices have gone up this year. So,
24:28they that's how they're justifying it.
24:30The way that this applies for P&D too.
24:32The way that FedEx thinks about it is
24:33there is some number, some payroll or uh
24:36some profit margin percentage that they
24:38want all contractors to be around and
24:40they're trying to create contracts that
24:42help the average contractor achieve
24:44that. They aren't going to tell you ever
24:45exactly what that is. Uh and they're not
24:47even going to tell you all of the things
24:48that go into that calculation, but that
24:51is on the back end what FedEx's
24:53engineering team is going to communicate
24:54to you in negotiations for PND. On the
24:57flip side, what you're trying to do is
24:58make sure that if there are expenses you
25:01think FedEx hasn't properly taken into
25:03account that you're communicating that
25:05to the engineering team to try to get a
25:06higher rate. That process doesn't really
25:09exist with linehaul right now. Again,
25:10we'll see if that changes in the future,
25:12but for now, it's just FedEx says these
25:14are the rate increases. This is some of
25:16the rationale of why, but we're not
25:18going to tell you exactly what all the
25:19numbers are behind it.
25:20>> Are the historical rate increases?
25:24Uh, I don't think there's any like
25:26technical place that it's published, but
25:28we can give you that information if you
25:29come to us. Yeah.
25:30>> Thank you.
25:31>> Yeah.
25:37>> Good afternoon. My name is Wanda Curry
25:39from Columbus, Ohio, and I'd like to
25:41know what is the average line call rate?
25:44I know it says per mile. What is that?
25:47Um, not the driver's side, but what do
25:49they pay? Or is that based off a region
25:52of the country as well? It's also based
25:53on region. Do you know off the top of
25:55your head? No. Okay. Ivan's one of our
25:57analysts, so I was like, if there's
25:58anybody that might in this room, it
26:00could be him. But yeah, it it varies
26:02region to region. So, it's not something
26:03that I would want to just throw out the
26:05wrong number. But if you did ask us
26:07about your part of the country, we could
26:08go in and tell you right now.
26:10>> And is it um terminal to terminal? Is it
26:12all miles?
26:13>> It's it's region. So, all miles sort of.
26:16Um, so an important thing to know with
26:18linehaul is there are some uh lower
26:21mileage runs where they pay at a higher
26:23rate where there's basically a chart
26:25where when you're below a certain
26:26mileage because it's just more expensive
26:29for you to do those short runs, they pay
26:30at a higher rate. Um, there's something
26:33called spots as well in the network
26:35where
26:36you think about an average P&D business.
26:39Let's say they have like a Bass Pro Shop
26:41that gets a,000 packages a day. They
26:44could dispatch three or four trucks to
26:47that Bass Pro Shop every day, but that's
26:49a nightmare. It completely tanks your
26:50profitability. So, what they say is, "We
26:52want to give that over to the line hall
26:53guys." And so, somebody on the line side
26:55will just take a trailer out, fill it
26:57up, come back basically every day. You
26:59might be doing 10 miles, but they'll pay
27:01at a much higher rate. So, spots can be
27:04really profitable if you find a business
27:06that has those in it. So, just there's
27:08more to talk about there, but there's
27:09plenty that can be really interesting
27:11with those. I know people who are doing
27:12really well with spots. Yeah.
27:18>> I actually have two questions. Um first
27:21question would be, is there a resource
27:23where I can find out where all the
27:25terminals in my area are?
27:29>> Yes.
27:31Call us. [snorts]
27:32>> Okay.
27:33>> That's all I'll say. There's not there's
27:35not publicly. That's what that's Yeah,
27:37there's that answer. Yeah.
27:38>> Perfect. Uh the second question is um is
27:42there someone in particular name
27:44yourself uh to uh consult to see if
27:48certain terminal managers are under
27:52management?
27:53>> So
27:54what I would say is part of what we do
27:56when we value a business is we ask a lot
27:59of those questions of the seller of are
28:01there any others operating remotely at
28:04the terminal? Like do you know anything
28:05about the terminal manager's perception
28:08of it?
28:09I wouldn't say that we have an exact
28:10database of it, but we will try to
28:13communicate on any marketing documents
28:15if remote ownership is an option. So, we
28:18try to do that for you on an individual
28:20basis. Uh we do have our consulting
28:23programs. If you're working with one of
28:24our consultants and they know that
28:25that's a priority for you, that will be
28:27something that they're looking for
28:28proactively either in our deals or
28:31externally. But the I would say it can
28:34be challenging if you're trying to just
28:36say I know that Cleveland has remote
28:39ownership opportunities because those
28:42terminal managers change like every 12
28:45to 24 months. And so you want to make
28:47sure that you have options and if you
28:51can get in and you're already operating
28:52remotely, great. But it would be really
28:54difficult for us to say we've pinpointed
28:56each point on this map that's perfect
28:58for remote ownership because those can
29:00change a lot. And a guy who says he's
29:03super comfortable with remote ownership
29:04with one person might not be comfortable
29:06with the next. So what we focus on is
29:07who's open to it and can we train you to
29:09be somebody who can be successful in
29:12those interviews and make yourself
29:15marketable to that person as somebody
29:16who can operate remotely and never say
29:19absentee. This is not an absentee
29:21business. There are opportunities where
29:23you can operate in different places than
29:25the terminal, but you want to make sure
29:26that you have ways to manage that
29:28business wherever you are.
29:30>> Yeah.
29:32One more and then I'm scream at you
29:34apparently. Uh go on to the next one.
29:37>> Hope you're awake, I guess. Yeah.
29:42>> Hi. Uh this is Prem.
29:43>> Yeah. So for the first time buyers or
29:47road buyer owners, what are the top
29:49three reasons uh to fail in the first 12
29:52to 24 months?
29:54>> Okay. Uh I will touch lightly. I've got
29:58what 15 minutes, 13 minutes. Um so I'd
30:03say one of the reasons is if you get too
30:04big too fast and aren't ready for it.
30:06Growth can be one of the fastest killers
30:08of somebody who doesn't have a plan for
30:10it. It just gets expensive fast. Um, so
30:12you want to make sure if you're entering
30:14a territory that's really high growth
30:15that you know maybe they're building a
30:17bunch of new apartment complexes or
30:19there's more coming. That's great.
30:20That's really advantageous. You want to
30:22know that there's extra volume coming.
30:24But if you're not prepared for it, that
30:26can get you out faster than almost
30:27anything. I would say that the the
30:29biggest problem, the thing that that
30:30most people run into is safety. Um,
30:33there's lots of things that FedEx will
30:36be upset at you about and can have tough
30:40conversations with you, but safety is
30:41one of the fastest ways to lose your
30:44contract because the We haven't really
30:46touched on it, but one of the biggest
30:47advantages with FedEx is that you're
30:49operating under their DOT number. Makes
30:52insurance really cheap. You don't have
30:54to have general liability insurance.
30:56There's a lot of things that make that
30:58really attractive. What that also means
31:01is that any safety failures reflect on
31:04FedEx's DOT number. And they would
31:06rather do anything than lose that number
31:09because if they lose that number and
31:10they're not a national carrier, they
31:11can't compete with UPS, they can't
31:13operate in a lot of states. So, they
31:16will be the harshest on you for safety
31:18violations. So, it's really important to
31:20have a safety plan before you start,
31:22safety culture, and that can't be
31:23something that you ever allow to go by
31:25the wayside. Um,
31:28let me think of a third third one I'd
31:30say is fleet. Um, if if if [snorts]
31:33there's anything that I have buyers come
31:35back to me the most often with
31:37complaints after a sale, it's that the
31:40fleet was in worse condition than they
31:41thought it was going to be. Um, that's
31:43one of the quickest ways to have
31:45unexpected expenses. And maybe, you
31:48know, there's all kinds of things that
31:49can spiral from those fleet failures.
31:52So, I don't, again, we got fleet
31:55strategy coming up later. I can't go all
31:56the way into fleet strategy, but I would
31:58say it's very important to get your
31:59fleet inspected before standup. That's
32:01any business in the logistics space. So
32:04that you know the baseline of what
32:05you're walking into. If there are things
32:06that need to be repaired, it's on the
32:08seller to do beforehand. Uh and then at
32:10least you know what your baseline is
32:12that you can plan accordingly. It's very
32:15difficult if you think your fleet is one
32:18thing and you've planned for that and
32:20then you find out a weekend that it's
32:21radically different. you're going to
32:23have a lot of expenses and strategy
32:25changes that have to happen in real time
32:26while you're also trying to figure out
32:28how this business works at all. So, you
32:30want something where you you know what
32:31you're getting. You're paying a fair
32:32price for the business and that you can
32:34plan accordingly and make sure that any
32:35of those expenses are paid by the seller
32:37for him.
32:39Yeah.
32:41Okay. Last one for real.
32:48Uh AJ from Houston area. Uh, what should
32:52be the good mix of runs if I'm buying
32:55any business?
32:57>> Oh man, do I have 30 minutes? No. Um, so
33:00he's talking about you talking about
33:01line hall runs in particular, right?
33:03>> Yeah. Um,
33:05so just lightly, there are dedicated
33:09runs in the FedEx business where you
33:11know exactly where it's going to just
33:13about every day of the week there and
33:14back. Those are the most consistent.
33:17It's one of the easiest to chart the
33:19profitability because you know exactly
33:20what topline you're dealing with. You
33:22can chart out your expenses pretty
33:24accurately. I like to see a nice mix, a
33:26nice core base of those. Unassigns are
33:29kind of the next level. Uh they're more
33:31variable in terms of you don't always
33:33know what your destination is dayto-day.
33:36Um it could be that you're doing more
33:37mileage on your unassigned runs than
33:39you're dedicated. It could be that
33:40you're doing a lot less. It could be
33:41that two days of the week you're doing a
33:43tons of ton of mileage and the other
33:44three they're sitting or you're trying
33:45to work to find more lanes. So, there's
33:47just more variability. Uh those are
33:49great as well. Also, again, don't have
33:52time to go into all of the acquisitions,
33:54but those are really good for when
33:55you're trying to have flexible volume as
33:57you're trying to grow. So, I like I like
34:00seeing those as well. Spots, if you can
34:02get businesses with them, you should.
34:04When we're talking about financials, I
34:06think it's tomorrow. Uh we do see a lot
34:08of lineh hall businesses that their
34:09profitability is higher if they have
34:10spots. Um they're a little bit scarier
34:13for people because they're not on the
34:14contract, but I haven't seen a situation
34:16where they don't transfer in the sale.
34:18But that's the thing that gives people
34:20immediate pause, but I would say that
34:21those are often the businesses that are
34:23the highest profitability on the line
34:24hall side that have a core in addition
34:26to some spot work. Um but I would say if
34:29you're doing completely unassigned, it's
34:31it can still be very profitable, very
34:33successful. You just have to have the
34:34right plan. you have to know that you're
34:36going to have to work a little bit
34:37harder to set up those lanes uh and to
34:39schedule accordingly. But like I said, I
34:41see plenty of businesses that are really
34:43successful. It's just you might need
34:45more manager help or more of your time
34:47if it's all unassigned to make sure it's
34:49right.
34:52Okay, let me get to Amazon before I run
34:54out of time. Um so I'm not going to talk
34:56about Amazon freight program, which is
34:58another side of the Amazon coin. Um
35:01that's the the line hall side. Um, so
35:03they do have a P&D and line hall
35:05component in the same way that FedEx
35:06does. Amazon freight program is very
35:08very difficult still to get into as a
35:10new owner. So I'd say I wouldn't try to
35:13target that as your first step unless
35:14you already have line hall experience or
35:16you're already in Amazon. Even then it's
35:18not easy. Um, but there are a couple of
35:19people if you come to me and say that's
35:21what you most want to know about. I know
35:23a couple of people here who are running
35:25it currently and I can point you to them
35:27after this and um, have you talk a
35:29little bit more with them from people
35:30who are running it right now. Um, but
35:32the main one I'll talk about on the
35:33Amazon side is kind of the the normal
35:35delivery model. It's very similar in
35:38some ways to the pickup and delivery
35:40model with FedEx. The big differences
35:44are tied to the fact that FedEx and
35:46Amazon are very different companies. Uh,
35:48so FedEx was a shipping company first
35:50that has technology. Amazon's a
35:52technology company first that has new
35:55logistics components that they've pushed
35:57in these last few years.
35:58They are also more controlling in
36:00general than FedEx.
36:02That is a pro and a con. It's, you know,
36:05it can be a pro because they have a lot
36:07of their technology and a lot of their
36:09metrics that they roll out to all
36:11contractors that you're following and
36:12getting to see a scorecard with very
36:14accurate data of everything that's going
36:16on. You know, exactly what they expect
36:17of you. But it can also be something
36:20where Amazon's more likely to change the
36:22model or more likely to know exactly if
36:25you're failing and can be really
36:26heavy-handed on what you need to do to
36:28your business. Really feels like they're
36:31telling you what to do with their
36:32business, but uh it can be that type of
36:34relationship with Amazon. They are
36:36stricter.
36:38One of the other things is the approval
36:39process with Amazon is very different
36:41than FedEx. The FedEx approval process,
36:45you buy from an existing person. you
36:46there's a set process to get into the
36:49space if you're buying from an existing
36:51uh owner Amazon there is a set process
36:55it is not a guarantee that you pass it
36:58uh they are very selective and and I
36:59would say the
37:01the general criteria we see right now
37:04for the highest success of somebody
37:05getting into the system is you have cash
37:09uh you live close to the business you're
37:11buying like in the territory and you
37:15either are unemployed currently or do
37:18not have a demanding current job because
37:20they want to know that when you take
37:22this business, you are ready to step
37:24into it and that is your full-time
37:25responsibility. Now, I mentioned some of
37:27those negatives. The plus side, Amazon
37:30can be very lucrative. Uh it is a
37:32business where they are they own the
37:34fleet. Um they are doing a lot of the
37:37routing designations for you for how
37:40many routes you're fielding over the
37:41course of a day. you don't own zip
37:43codes, you own kind of areas uh of a,
37:46you know, of a city like North
37:48Nashville. And they will tell you how
37:50many routes to expect over the next
37:51month. And that can vary, but um the way
37:55that they pay you, it basically is going
37:57to cover all of your expenses if you're
37:59hitting kind of the the base um
38:02expectation level. They have scorecards
38:04where if you're into the higher
38:06categories, it's essentially all bonus
38:08profitability if you can stay in those
38:10higher categories. It's not easy to stay
38:13in those higher categories, but
38:14Fantastic and Fantastic Plus are
38:16essentially the higher level scorecards
38:18for Amazon that can lead to a lot of
38:20additional profitability.
38:22Um, it is something where I I know a lot
38:25of people that are very successful who
38:27do FedEx and Amazon where they use
38:30Amazon to generate cash to buy more in
38:32the FedEx space because the equity is a
38:34little bit stronger and the multiples
38:36that these transact at in the FedEx
38:38space. So, I know people who use, you
38:40know, their their cash flow generator in
38:41Amazon to grow with FedEx. And Amazon's
38:44more restrictive about how large you can
38:45be as well. They'll let you grow a lot
38:47at a given terminal area, but they don't
38:50really like multi-oute or multi- uh
38:53location operators. They're more
38:55flexible about it than they have in the
38:56past, but they typically will say, "This
38:59area is yours. If you can continue to
39:00operate above standards, we'll allow you
39:02to grow around you, but we don't want
39:05you to have Nashville and Texas." I know
39:08people who do. You really have to prove
39:09that you're capable of it.
39:12Um, Amazons are typically all cash.
39:16There's some it financing is just really
39:19difficult. The challenge with Amazon is
39:20that they approve the contracts and they
39:23typically don't like debt on anybody
39:25who's coming into the network. So, it
39:27can be challenging to get in. There is a
39:29bench a a free way to get into the
39:32Amazon space. uh it may take months or
39:36years and you may list your top four
39:39places you'd like to be and they call
39:41you and say, "Hey, I know those are your
39:43top three, but what about South Dakota?"
39:46And if you say no, you go to the bottom
39:48of the list. So there is it it's not a
39:51guarantee that you'll get in where you
39:52want to be, and you may have to be
39:54willing to move and go there if you're
39:56not buying an existing contractor.
39:59So that's Amazon.
40:01I'm going over for sure, Tucker. Uh,
40:04you're going to come up here, but um,
40:06any other questions on Amazon before I
40:08just briefly touch on bread?
40:13Okay. Um, let me Oh, wait. One one
40:16question here.
40:21>> Hi, uh, Fritz from Brooklyn, New York.
40:23Uh there's been some articles recently
40:25around Amazon and how a lot of folks are
40:27looking to eat because of some of the
40:29restrictive natures as well as the
40:31issues with insurance. Are you aware of
40:34like any changes to the model that's
40:36going to make it more attractive for
40:37people to stay?
40:39>> Insurance is a big one. Um so I talked
40:42about the advantage of FedEx. You
40:43operate under their DOT number. You
40:45don't with Amazon. Um, so the liability
40:48insurance is very expensive and in the
40:51last year or so it's skyrocketed for a
40:54lot of contractors which has made it
40:55really difficult to operate. Amazon
40:58hasn't said anything. Amazon is much
40:59less likely to communicate of like, hey,
41:01this is what we're planning on changing.
41:02They're going to do it when they intend
41:04to. Uh, I haven't heard of anything in
41:06particular. Uh what I would say we have
41:09a tomorrow morning we have an Amazon
41:11panel with um really talking about the
41:13numbers that I think is a good
41:15opportunity to see like what are people
41:18doing successfully there to mitigate
41:19that where do we think Amazon could move
41:21in the near future. Yeah.
41:25Okay. Let me touch on bread quickly. Um
41:28so bread is a model that is similar and
41:31very different. Um you are a distributor
41:34connected to a bakery. uh you know a
41:36bakery like Flowers, BMBBO, Pepperage
41:39Farms, Missions, there's a bunch of
41:41these that are you know common household
41:42names you own. It's a territory. It's
41:46more than just zip codes. It might be
41:48you know you own from 4th Avenue to to
41:5110th Avenue. It's they'll basically draw
41:53it out on a map and you'll own every
41:56business in those territories that
41:59currently buy bread or could buy bread.
42:02One of the biggest differences here with
42:04this model is that you do have some
42:06control over the revenue in the
42:09business. You will have set stops that
42:11come with the territory that are already
42:12ordering business that you can work to
42:15sell additional product lines into those
42:17groceries, make more money there. You
42:19also can find new businesses that are
42:22currently using bread and are not using
42:25the bakery you're working with as
42:26additional places that you can sell into
42:29in your territory. And it is all things
42:30that you own.
42:32So without going too too far into it,
42:34the average bread business is usually
42:37only about one route. There are some
42:39people that are doing one or two and
42:41then I won't go all into it right now,
42:43but there are models where people are
42:45working 10, 15, 20 routes. It is not
42:49something I've seen over the last until
42:50about 5 years ago at most. Like there's
42:53a lot of people that are being it's
42:56moving towards what we've seen with
42:57FedEx where basically bakeries are
43:00realizing that there is a lot of value
43:01and people operating businesses instead
43:04of just individual trucks. The average
43:07bread business route is significantly
43:09more profitable than the average one
43:11FedEx route. So as we continue to move
43:13into that model, there is a lot of
43:15opportunity there. There's some bread
43:18numbers courses that we'll have later if
43:20you really want to dive into those.
43:21Again, I talked too long, so I don't
43:23have time to go into all of that right
43:25now, but it is a really attractive
43:26opportunity, especially because the
43:29beginning entry level is typically only,
43:32you know, $50 to $100,000 and typically
43:35the bakery have financing options if you
43:38can't secure it from a bank. So, there's
43:40pretty easy options to get in at the
43:43ground level on these. So, one of the
43:46things that I wanted to do while we're
43:47here, one of the most important things
43:49you need to do while you're here is
43:51again talk to other contractors, but I
43:53also want to make sure that as you're
43:55here this weekend, you are thinking
43:56about the parts of this business that
43:58are the most difficult for you, what
44:00skills, what types of things you don't
44:02know how to do because you've got a room
44:04full of vendors that are there to fill
44:06those gaps. One of the things right now
44:10that I want to have come up is the
44:12lending side for unless you plan on
44:14buying cash. Uh you will need a bank and
44:18you want somebody who's financed these
44:20deals before that can give you the right
44:22answers and not say, "Oh yeah, we can we
44:24can finance this." And then you find out
44:27right before closing that they hadn't
44:29talked to credit and now they're like,
44:30"Oh yeah, there's no way that we'll fund
44:32a FedEx deal." Uh, so I've got Tucker
44:35here from GBank that I wanted to briefly
44:37introduce himself, give some info on
44:39what lending is like, uh, in the FedEx
44:41space in particular, and then I'll
44:43answer more questions and not hopefully
44:45not have anybody in the next session get
44:47mad at me for going over.
44:50>> Thanks, Josh. I appreciate it. Um, I
44:52know there's a lot of ambient in the
44:53audience, so if y'all can't hear me,
44:54just please let me know. Uh, one of the
44:56things that Josh just mentioned is how
44:58often uh, someone will look to get in
45:01the FedEx space. they'll go to their
45:03local bank where they have a
45:05relationship and then 30 days later they
45:07come back and say yeah like our local
45:09bank couldn't get this done. Uh it's it
45:12is a very unique space and there's a lot
45:14of different moving parts that most
45:16lending institutions are not familiar
45:18with. Um what I want to focus on and as
45:21I was thinking about this I really
45:23wanted to focus on what I thought you
45:25folks would find most important than why
45:28we can really make a difference uh at
45:31GPA. Uh just quick little couple of
45:34points about us. We're a $1.3 billion
45:36bank uh headquartered in Las Vegas. We
45:39are publicly traded.
45:41Uh 100% of what I do is provide SBA
45:45loans for new investors in the FedEx
45:47space and existing contractors in the
45:49FedEx space. Uh in the last two years
45:52going back to January of 2024, we have
45:55issued over 80 uh letters of intent or
45:59term sheets. only 11 11 of those did not
46:03move forward. Um the 11 that did not
46:06move forward were not because of what
46:08the bank wanted to do, but life happens
46:11to people. People change their mind.
46:12They decide to do something different.
46:15Um 100%
46:17uh of the ones that stayed with us uh
46:20went through, 0% of those individuals
46:23went to a different lending institution,
46:25which really speaks to our expertise. As
46:28I mentioned, a lot of moving parts, a
46:30lot of things that needs to be kept up
46:32with. um of the term sheets that are
46:36executed by our borrowers over the last
46:382 years, 100% of those loans have been
46:42approved by our financial
46:45kind of the main thing there for you is,
46:49you know, you spent a lot of time
46:50getting prepared to get up to that
46:52moment
46:53and then all of a sudden there's a brand
46:56new set of people that are looking at
46:57your loan request. I know what we will
47:00do and what we will not do. So I spend a
47:03lot of time on the front end getting
47:06everything prepared. So I know that once
47:08it does get the credit there's a very
47:10very very high likelihood that that's
47:12getting credit
47:15>> spoke about um expertise in the space
47:17again 100% of what I do is provide SDJ
47:20loans for FedEx um the support
47:23individuals within our organization are
47:25dedicated have a tremendous amount of
47:27experience in the FedEx space as well uh
47:29that includes both our underwriters and
47:31closes again with FedEx team so unique
47:35and have very intricate parts that need
47:37to be there has to be a level of
47:39familiarization or it's going to be very
47:41painful for everybody. That's the last
47:43thing that I want to happen is for it to
47:45be a bad experience to the black
47:47industry. Uh so we we do a lot of
47:49education. Um we encourage all of our
47:52folks speak with people like Josh and
47:54other people in our consultant. So we're
47:56constantly learning about the changes
47:58within the FedEx space. It it certainly
48:01doesn't remain stagnant. It does change
48:03over time. So remaining familiar with
48:05those is incredibly important.
48:08>> But in for at the end of the day if you
48:11folks are looking to buy a business,
48:13your intent is to get that transaction
48:15done so you can become an owner. That's
48:18very uh very important to us obviously.
48:22So we do a tremendous amount of
48:23preparation in regards to getting ready
48:25for that bit in regards to colleging up
48:29documentation education.
48:31Yeah,
48:33>> there is a huge sense of urgency on my
48:36behalf. In my prior life, I spent about
48:3810 years in the restaurant business and
48:41if any of you have ever been in that
48:42business, you know the sense of urgency
48:44is amazingly important. Um, so if we end
48:47up working together, I was spoken with
48:49many of you in this room. I've even
48:51closed deals with a couple of you in
48:53this room. you know that my sense of
48:55urgency in regards to followup and
48:57asking for documentation that's needed
49:00it's very
49:02um so I like to move fast I also like to
49:05remain incredibly organized so everybody
49:07knows exactly where we are in the
49:09process
49:10so a couple of things that are specific
49:12to SDA and I'll wrap this up number one
49:15u with us is our expertise fed space uh
49:19number two we can find up to 90% of the
49:23transaction ction and that includes
49:25providing working capital for you to
49:28cover with first month of operations and
49:30the different expenses that are
49:31associated with getting the loan loans.
49:33They including one of the biggest
49:35expenses that people don't realize
49:37they're getting is the sales tax that
49:39you most likely are responsible for
49:41paying on the lead that you're
49:43acquiring.
49:46>> SBA loans come with a full 10ear
49:49amorization. No payments, no prepayment
49:52penalties. You can pay it off, pay it
49:54down as fast as you want. We can also
49:56reamortize your loan after you make
49:59bullet pay. So if your strategy is to
50:02get your loan paid off as quickly as
50:03possible, an SDA loan can be a great
50:05route because at some point you change
50:08your mind and you decide that you want
50:10to hoard cash for whatever reason, you
50:13can do that as well. So SDA provides a
50:15pretty significant uh level of
50:17flexibility in that regard. I know we're
50:20running late, so I'm going to wrap this
50:21up. Uh we're going to be in the back
50:23corner uh after this session. Our booth
50:25is also directly across from this hall.
50:28Any immediate questions anybody asked
50:30that I can answer
50:32>> required
50:38money.
50:38>> Yeah. Okay. Repeat the question is what
50:39I was going to say. Yeah.
50:40>> So he asked about the maximum loan
50:42amount in the SPA. It's $5 billion is
50:45the maximum.
50:49just
50:52>> uh big the 320 air price drove up. Do
50:54you accept seller financing without
50:57paying?
50:57>> Absolutely. We actually encourage and
50:59prefer um so I know to be part of the
51:02financing uh from our perspective. It's
51:05a great idea for the seller to do best
51:07and you know future success. So
51:10absolutely.
51:11>> Well, real quick, Tucker. Tucker, wait.
51:13Is there a minimum seller financing that
51:15you would
51:16>> $5 million per what
51:20>> per guarantee? So
51:22>> per guarantor exposure. It's kind of
51:25complicated. We can definitely get into
51:2710.
51:27>> So he asked about seller financing, but
51:29like is there a minimum amount of cash
51:31you require from the
51:32>> So there is not a requirement for seller
51:34financing under most circumstances.
51:37Sometimes it is mandated and indeed
51:39depending on debt service coverage
51:42ratios and how much as a buyer you're
51:44injecting into the project.
51:50>> Thank you guys very much. Please come
51:51by.
51:53>> Yeah, like you said, he's there and out
51:55here, so you don't have to come back in
51:56here to his corner to find him. Um, two
51:59quick things I wanted to to leave before
52:01just in case there are any additional
52:03questions. one, if you do have questions
52:04about bread, the next session in here is
52:07actually hearing from one of the
52:09bakeries, uh, Flowers, about what they
52:11think about the space, which I'd say
52:13that in and of itself is a pretty
52:15different opportunity compared to, you
52:17know, a FedEx or an Amazon that would
52:19never come and speak at an event like
52:21this. U, but the actual provider, the
52:23bakery is here to speak about the
52:26opportunity they see in the space, what
52:27they're looking for, and how they see
52:29kind of the future of their space. So
52:31that's in here next if you're interested
52:32in bread. The other thing is one of the
52:35spaces I didn't mention is that we're
52:37going to be talking about here is uh
52:39security. It's a it's a new one that
52:40we'll be talking about for the first
52:41time, private security and what those
52:43opportunities look like. So we'll be
52:44talking about that a little bit later
52:46today with Andy Willis who's sitting
52:48there hiding. Um but him and I will be
52:50back up here in a few hours if that is a
52:52space that you're interested in. We'll
52:53talk about what that opportunity looks
52:54like uh again in the near and distant
52:57future. So any other questions? anyone
53:00else has before I let you go. You can
53:04also just find me outside so that I
53:06don't hold everybody here for uh over
53:08any longer. All right. Well, thank you
53:11everybody for being Oh, one question for
53:12or one from Tucker.
53:13>> Not a question, but just so everybody
53:15knows, we are giving away a couple of
53:17$250 visa gift certificates. Free money
53:20is best money. [laughter] Just register
53:22wherever you see our QR code.
53:24>> All right, thanks everybody. Have a good
53:25rest of the expo. Thank you for being at
53:27session one.
53:30>> [music]

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