Anchored Tiny Homes Started with a Facebook Ad and Quickly Became the Leading ADU Builder Franchise in The Country

Colton Paulhus, CEO and co-founder of Anchored Tiny Homes, began his entrepreneurial journey in 2019 with his father, a general contractor with 33 years of experience. Initially inspired by an ad for tiny homes on wheels, Paulhus tested the market by posting an ad on Facebook Marketplace, receiving 300 inquiries within three days. The immediate interest led to the sale of two tiny homes in the first month. In 2021, they pivoted to building accessory dwelling units (ADUs) due to financing challenges with tiny homes and immediately saw significant demand.

Paulhus’ entrepreneurial spirit was evident from his college years, where he played Division I football and dabbled in various ventures, including a mobile app, a clothing line, a water bottle company and a marketing agency.

“I was just trying to figure out what my niche was going to be and [find] something that would take off,” he said. 

The idea of franchising Anchored Tiny Homes emerged when a client, impressed with the business model, suggested it. This led Paulhus to research franchising extensively and eventually partner with Franchise Marketing Systems to build the brand’s operations manual.

“I’ve always had big dreams,” said Paulhus. “If I get the right thing, I'm going to take it nationally and globally.”

Anchored Tiny Homes focuses on solving the housing crisis by providing affordable housing options. Its franchise model offers significant earning potential with relatively low investment. It supports franchisees through comprehensive marketing and lead generation, ensuring a strong entry into the ADU market, which is poised for growth nationwide.

“We're on a mission to solve the housing crisis, so that's where it starts,” Paulhus said. “We're on a mission to provide more housing; there's a huge need across the country for housing … there's not a lot of affordable houses out there.”

Below is a transcript of the podcast. It has been edited for clarity, brevity and style.

Nick Powills: Welcome to another episode of Meet the Zor. I'm Nick Powills, publisher of 1851franchise.com. Very happy to have you here, Colton. Thank you so much for joining us. I'm not going to give away your story. I'm going to let you tell it. What I love about these interviews is that they give you a chance to talk to your audience. Anybody watching this might wonder, what's your business, and how are you transforming things? So, let's start there. Before we even get into why you decided to franchise, how did you get started in this business? What is the business?

Colton Paulhus: My name is Colton Paulhus, and I'm the CEO and co-founder of Anchored Tiny Homes. This is a family business we started in 2019. My dad has been a general contractor for 33 years, building garages, sheds, custom homes and all kinds of different stuff. I saw an ad for tiny homes on wheels being advertised on Facebook, and I went to my dad and asked if we could build tiny homes. He said yes, so I threw up an ad on Facebook. Within three days, we had 300 inquiries from people interested in tiny homes. We sold two tiny homes within the first month, and it just took off. We pivoted to ADUs [accessory dwelling units] in 2021 due to financing issues with tiny homes on wheels, and the demand for ADUs was huge from the beginning of 2021.

Powills: So, you decide to start this business, go to your dad and buy a Facebook ad. You had nothing to sell at that point?

Paulhus: Correct. I had nothing to sell. I threw up some photos on social media — didn't even pay for them, just used Facebook Marketplace. Within three days, 300 people reached out and I realized there was something here. I used other people's images, made sure they weren't copyrighted, and told people my dad's been a general contractor. The first two people were happy to have us build their tiny homes.

Powills: How did you price it out at that point?

Paulhus: The first tiny home we sold was for $82,000. My dad, being a GC, knew how to price things. We knew what framing cost, and I figured out the trailer costs and other things. We knew roughly where we needed to be.

Powills: Before this moment, what's your story? How did you get into entrepreneurship?

Paulhus: I've always been in the game. I played Division I football for Colorado State, then transferred to Weber State. After college, I got an insurance job with Farmers Insurance, but I felt the itch to try something in entrepreneurship. I started a mobile app connecting influencers to clients for fitness and live streaming. That didn't take off, so I pivoted to a clothing line, then a water bottle company and a marketing company — just trying to figure out my niche. I had a marketing company right before starting Anchored Tiny Homes, and when it took off, I went all in on this.

Powills: How fast did franchising come into the picture? Was it in the picture early on?

Paulhus: Not when we first started. We were just a local business making mistakes, trying different things. A client from FMS Marketing Systems reached out about an ADU and suggested franchising. I stayed up all night researching franchising and hired Franchise Marketing Systems to build our operations manual. It took about a year from the idea to really getting things running, starting around the beginning of 2022.

Powills: Did your dream shift when you started thinking about franchising?

Paulhus: Big time. I've always had big dreams, thinking nationally and globally. Franchising offered a cool leadership opportunity, partnering with motivated people to build the brand.

Powills: How do you protect the culture and ensure you're choosing the right franchisees?

Paulhus: We have an approval day where we spend a full day with interested candidates, breaking bread, running through the process and asking questions. We determine if they're a good fit based on that. We've had a lot of demand, so we need to figure out who's the right fit.

Powills: Do people believe the success you've had?

Paulhus: There's a lot of skepticism. People can't believe the potential with such a low investment, but in most markets, there's a big demand and we're the first in the industry to franchise.

Powills: What are the risks and how do you manage them?

Paulhus: Financing has been a huge issue, but we've partnered with companies that specialize in ADU financing. Recruiting local general contractors is another challenge, but we have a process to mass market to local GCs and help recruit them.

Powills: What's the blind spot in your business, and how are you addressing it?

Paulhus: Financing had been a huge issue, but now with partners like Renify, we've figured out how to vet people to see if they're qualified. Another challenge is recruiting local labor, but we have a process to mass market and recruit GCs.

Powills: What's the unique selling proposition now?

Paulhus: Joining early on allows you to make a massive impact and make a lot of money. We're early in the industry and as a company, so there's opportunity in different markets. We're also the first mover in specializing in ADUs, which is solving the housing crisis. Different markets are approving it on a statewide level, and we'll take over the country from a franchisee standpoint.

Powills: What is the strength of your product and support for franchisees?

Paulhus: The earning potential on each individual product is huge, and the support we offer includes handling all lead generation, marketing and booking appointments. From an operations standpoint, we have a full manual that breaks down step-by-step how to build an ADU.

Powills: What's the demographic of your typical customer?

Paulhus: Our clientele is often either investors with cash or families deciding between buying a more expensive house or building an ADU in the backyard. Most are doing a home equity line of credit or a cash-out refi.

Powills: What are the main struggles customers face, and how do you address them?

Paulhus: Financing is a common struggle, but we partner with companies specializing in ADU financing. Another issue is finding local general contractors, but we have a process to mass market and recruit GCs.

Powills: What should someone considering your franchise know about the investment?

Paulhus: The investment level is low, in the hundreds of thousands, and the earning potential is significant. We're transparent about our corporate location's success, having made $49 million in 2022 across 10 territories. We're protective of the culture and careful about who we choose to join us.

Powills: What's your final message to potential franchisees?

Paulhus: This is a unique opportunity to join early in a growing industry with significant demand. Being a first mover in your area to specialize in this product will provide a substantial advantage. We're on a mission to solve the housing crisis, and if you're motivated to join us, the potential for success is tremendous.

Watch the  full interview here.