Franchisor Stories
With a focus on cost reduction and franchisee success, P3 Cost Analysts delivers a unique business opportunity for professionals seeking to build their own ventures in B2B service.
Michael Peterson, franchise development leader at P3 Cost Analysts, recently sat down with 1851 Franchise’s Nick Powills on the “Franchisor Hot Seat” podcast to outline his brand's innovative approach to franchising and what makes P3 an attractive option for aspiring business owners. As a nationwide cost-reduction consulting firm, P3 empowers franchisees to connect with businesses and governments, helping them optimize expenses while sharing in the savings. Peterson highlights how the franchise’s accessible investment model and robust back-office support provide franchisees with the opportunity to operate a high-earning business with low overhead.
During the discussion, Peterson discusses the qualities of the ideal P3 franchisee candidate. He also highlights the brand’s unconventional royalty structure and its focus on transparency. Whether you’re new to franchising or an experienced professional, this interview sheds light on how P3 Cost Analysts is carving out its niche in the franchising industry.
A transcript of Powill’s interview with Peterson has been provided below. It has been edited for brevity, clarity and style.
Nick Powills: On this “Franchisor Hot Seat,” we're talking about P3 Cost Analysts. Coming up next.
All right, Michael, let's start with you, then we'll get into the business. How did you accidentally fall into franchising? What's your franchise backstory?
Michael Peterson: You know what, Nick? I love the way you phrased that, because it seems like everybody in our industry kind of just tripped and fell into it, right? My journey started in 2006, so it’s been a while.
I was working at a marketing company when I was headhunted by a startup franchise that no one had ever heard of. Within a year, we were the fastest-growing franchise in the United States. I grew that brand — moving from sales to chief administrative officer — and expanded it to about 300 retail locations. I fell in love with what we were doing, which was in the video game space.
In 2008, while many remember the housing crisis, I remember it as the release of the iPhone 4, which decimated that industry. I moved on but couldn’t leave franchising. I fell in love with it.
Powills: Now with P3, what’s the backdrop of the business? For someone with money but no clear direction, how would you explain it to them?
Peterson: At its core, P3 is a nationwide cost reduction consulting brand. Our franchisees work with businesses and governments to analyze and reduce their expenses. We focus on specific expenses that might not seem significant in dollar amounts but are impactful in percentages.
For example, we analyze utilities, waste, telecom and similar costs. We reduce those expenses and share the savings with the client. In essence, we are a B2B cost reduction service for medium-sized businesses, governments and schools.
Powills: Who is your ideal candidate for a franchisee?
Peterson: First and foremost, we’re not necessarily looking for hardcore salespeople, even though it’s a business development brand. Since we started franchising in 2019, we’ve found that successful franchisees are people who enjoy having conversations and building relationships.
One of our top franchisees spent 30 years as a fire chief, engaging with his community. We’re looking for people who have the tenacity and desire to build their own business from scratch. Unlike traditional franchises where customers might walk in from day one, P3 franchisees build their client base. They need to be comfortable talking to people and developing those relationships.
Powills: Do candidates need an accounting or finance background?
Peterson: It’s definitely an advantage if they can manage or speak to a P&L. However, the most critical skill is the ability to have interpersonal conversations. Our franchisees often work with C-level and E-level executives at companies generating $20 million to $200 million in revenue. Presenting well and speaking their language is key.
Powills: How are franchisees finding P3?
Peterson: We have strong SEO campaigns that attract individuals searching for opportunities in B2B home-based businesses with minimal employees. We also work with franchise consulting companies and brokers, leveraging relationships built since 2011.
Powills: What’s your current royalty structure?
Peterson: We break the traditional franchise mold. There’s no royalty per se. Instead, we split the savings we generate for clients. Franchisees receive 40% of the savings we earn, and that’s it. From there, we pay our cost reduction specialists, who support the franchisees.
Powills: Have you considered building a sales team to help open doors for franchisees?
Peterson: That’s essentially what we do. Franchisees outsource the service portion of their business to us. We have a team of specialists — utilities, telecom, waste — who focus solely on their areas. This approach cuts the franchisees' workload in half and ensures they deliver exceptional results.
Powills: What percentage of your clients are franchisors?
Peterson: Not many. Our clients are typically businesses or organizations generating $20 million to $200 million in revenue. For telecom services, for example, they must spend at least $60,000 annually per location.
Powills: Let’s talk about franchisee recruitment. How do you explain the day-to-day experience?
Peterson: We’re working on creating detailed calendars and case studies to illustrate the day-to-day. Our website is deep with hundreds of pages and resources for both franchisees and potential clients.
Powills: Do you include earnings claims in your Item 19?
Peterson: Absolutely. I’m a stickler for transparency. Our Item 19 includes average, median, high and low earnings for franchisees in their first, second, third and fourth years. For example, franchisees starting in 2023 averaged $40,000 in their first year. Those who started in 2021 were averaging over $250,000 by 2023.
Powills: That’s impressive for a $60,000 investment.
Peterson: Exactly. Our investment is low and franchisees can replace their executive-level income within a few years.
Powills: What’s your vision for P3?
Peterson: We’ve grown to 40 franchisees since 2019, which many franchisors take a decade to achieve. My focus is continuously refining our value proposition and messaging to capture attention and draw in the right candidates.
Powills: You’re in control of nights, weekends and your business model. For someone weighing their options, the financial opportunity with P3 is remarkable compared to higher-cost franchises like pizza chains.
Peterson: Absolutely. And if you’re in love with making pizza, don’t buy a pizza franchise. You won’t be making pizzas; you’ll be managing a business. With P3, franchisees have control, a low investment,and the potential for significant earnings.
Powills: Michael, thanks for your time. This has been another “Franchisor Hot Seat.”
Peterson: Thanks, Nick. Looking forward to reducing your costs soon.
Watch the full interview above or on YouTube.
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