Why Most Franchisees Stay Small | 319

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Download my FREE 8-Figure Playbook

This playbook walks through the exact process I used to build from $0 in 2016 to $50M+/year today across multiple franchise brands

Grab it here: https://brianbeers.kit.com/b79cf77012

Let's connect:

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Transcript

SPEAKER_01 0:00

Welcome back to the Business of Beers Podcast, your daily dose of strategies, tools, and tips to help you build an eight-figure business. Today's episode is a clip from one of my YouTube lives. If you'd like to hear the whole thing, there's a link below in the description. Cheers.

SPEAKER_00 0:16

In the franchise world, uh you see a lot like there's this these two sides of it where you've got a lot of people who who get in the business and you know, essentially they they buy themselves a job, right? They they get started, they're in it every day, they they they have trouble really removing themselves. Uh and then, and and that was like, I would say that's the bulk of franchisees, right? When you survey it out and you see all these stats, you know, a lot of people uh really just have have trouble growing it. And then you've got on this total other spectrum, you know, there's there's like Greg Flynn and the Flynn group, who've got, I don't know, they it's like 4,000 locations, right? And they've just built this massive business through franchising. And even in you know, my world, you know, in Midas, uh, you know, we we're now the the fourth largest franchisee, something that that range. We have 35 locations in in our brand, but two-thirds of the franchisees, even in MITS, are in um are single unit operators, right? And so it's kind of like you can look at us, you can look at the industry and be like, all right, there's we all operate the same business model, right? We all operate a Midas, for example, in my world. But then, so we all have the same brand, we all have the same systems, we have the same training. Like we have all the same tools we're given, but then there's these some cases where, you know, two-thirds stays stay really small, and then there's this group of people um who are able to make something really big. And so uh that's kind of what I want to talk about today is kind of how you can go from um you know, kind of starting small, starting where everyone is, and then you know, primarily through growth, through acquisition, start to acquire other franchisees, uh, and then also to open up new territories too and continue to develop. And I think those are the two sides we have. And um, you know, one of the big things that I think makes franchising have this ability to do these roll-ups. And when I'm talking about roll-ups, we're talking about acquiring other, you know, locations. When I when I look at my you know history of it, you know, we've grown from two locations that we bought in 2016 to you know the 35 that I own today. And, you know, franchising's kind of like this two-sided, um, this two-sided sword, right? Because on one case, we can get into it. We all have to sign these contracts, right? Like the whole point of signing a f being a franchisee is you're contractually bound to operate it. And in some ways, it's really good because that contract is what gets you access to the big brand name, to all these systems, to the communities. But on the other hand, the contract is also what like keeps you in the business. Like you, we we can't just close it up and walk away, right? We're we're contractually obligated to um continue the operations or or s or to sell or you know, sell that contract to somebody else to continue to operate it. And so, you know, once you become a franchisee, you know, the the easiest way for you to get out of the business, right, is to sell your contract, to sell your franchise to somebody else who's already a franchisee, who's already signed that contract, who already gets the business, right? They're already approved by the brand, they're already operating. And so it's and then so the the buyer, right? So in this case, if if all everyone here is is trying to execute this model, say, hey, how do we how do we grow through through acquisition? Uh, how do we buy other other franchises? You're in the other end of that spectrum, right? Where you you're also a franchisee, you signed this contract, um, but now you are acquiring it from other people, right? You're you're essentially in some cases like buying their problem, right? That then it's on you to then then fix it up. And so um, yeah, so that's the thing, right? So you get in this thing if you can become that good operator, where you can be the one to have the good systems, and then you can start to build these relationships with other franchisees in the market when they want to get out or they want to sell for for whatever reason, and you can become that de facto person that they go to. And and then you're able to then do these acquisitions, right? And you're able to bring them in and you already have the systems, you've you've you've got the playbook. And then that's how you really can get these synergies going. And so I want to talk about, I guess first, you know, so I'm a I'm a how do we spot some of those, these, these opportunities? And how do we go about it from the the strategy to say, all right, I'm I'm here, and then what direction do I want to grow this thing? This is kind of how I think about it. And this is kind of like our sales history. Um, I've shared this before in other other videos, but got started in 2016 with my first two locations, and then you know, kind of slowly grow through one location at a time, one location, two locations, open another. Uh, kind of really built the foundation, one one basically one store per year uh for a number of years before we really got our footing, we really gained confidence in in our then ability, my ability to be able to say, hey, I'm I'm ready to do some acquisitions and start buying out some other franchisees. And once for me, it was like this it's like a light switch of you know, I was really scared to grow outside of my like existing footprint. Like I I wanted to be able to drive to every store, I really wanted to be able to like touch everything, and then and that's why like it was this like slower growth, plus like learning it in the back office and whatever, building cash flow and all these things. But then once we were able to kind of break into a new market, and for me, this was uh all of Philadelphia going into New Jersey, which you know it's like an hour away, it's or an hour and a half, it's it's it's not like it's a plane ride. Um, but that unlocked it, right? And then as soon as we were able to say, hey, we got this, like we know how to do this, we've got this market that we're able to operate remotely an hour and a half away and have success with that. Um, that's what then unlocked to say, well, we can buy another market another hour and a half away, and we can buy another group, um, and then can continue to kind of fill it in. Uh, and so you know, we've had some of this massive growth over really just the last three years. Um, but it started back then. So for for anybody who's just like getting started out, uh, you know, don't like a lot a lot of growth can happen way quicker than you think. Like a lot of times, like our brains think in linear terms, like we think, oh, like I'm growing, you know, 20% a year, and like I'm just gonna assume because I grew at 20% in the past, I'm gonna grow 20% in the future. Uh but but at least in the franchise world, especially if you can grow through acquisitions, once you can figure out how to buy like one location and integrate it and buy two and then three and then four, to to to add seven, to add five, to add another 10 isn't that much different. Even today, like if we had an opportunity or really wanted to pursue acquiring a similar size group, if I wanted to acquire another 20 or 30 stores in a single shot, uh, like I feel that we have the operational expertise now and the teams in the systems to be able to do that to to double overnight, right? To go to 50 to 100.