The Brian Beers Show – Episode 304

Title: Nobody Buys Franchises This Way (That’s Why I Own 35)
Release Date: January 5, 2026
Host: Brian Beers

Episode Overview

In this episode, Brian Beers, a seasoned entrepreneur and owner of over 30 Midas Automotive franchise locations, shares his insider strategies and hard-earned lessons on successfully negotiating a franchise agreement. Drawing from his 15 years in the industry and personal experience helping dozens of clients buy their first franchise, Brian reveals which aspects of franchise contracts are negotiable, the major pitfalls to avoid, and the one catastrophic mistake that nearly bankrupted him. The episode is packed with granular advice and real stories aimed at empowering aspiring and current franchisees to secure better deals and avoid disaster.

Key Discussion Points & Insights

1. The Realities of Franchise Negotiation

• Disclaimer: Brian is not a lawyer – always consult a franchise attorney.
• Focus: Actionable negotiation strategies, not legal advice.
• Franchisors’ contracts are designed to protect the brand and favor their interests.

2. What’s Negotiable in a Franchise Agreement?

A. Territory (00:55–09:10)

• Most Negotiable Element: “Territory is the most flexible part, is the part that you have the most leverage in terms of getting what you want, getting bigger areas, getting better areas.” (Brian, 06:58)
• Territory Mapping: Most brands use mapping software; it’s often imperfect and worth scrutinizing for local logic.
• Strategy:
  • Prune unwanted portions, request additions where sensible, ensuring the territory remains contiguous.
  • Larger multi-territory deals provide more leverage for better boundaries or greater population coverage.
• Notable Tactic: Try to negotiate the total population upwards (e.g., from 200K to 230K people per territory).
• Exceptional Opportunities: Unpopular or awkwardly situated territories can sometimes be added for a bargain or as an extra.
• Expansion Rights: First right of refusal on adjacent territories is rare (due to messy conflicts with existing franchisees’ rights), but informal “handshake” agreements to be informed of interest in nearby areas are common.
• Retail Radius Protection: If no territory, request the largest protected radius possible (“One of our clients... was able to increase that protection to five mile radius.” – Brian, 12:15)
• No Protection Example: Brian’s own Midas agreements have zero legal territory protection—but the brand uses mapping software to prevent cannibalization.

B. Ongoing Fees (09:11–17:12)

• Royalty Fees: Rarely negotiable unless the franchisor is desperate—generally a red flag.
• Minimum Royalty: This is often more flexible:
  • Negotiate to reduce, eliminate, or extend the period before minimums kick in.
  • “You could try to get these minimums eliminated, reduced, or extend the time frame.” (Brian, 17:00)
• Brand Fund: Usually non-negotiable, but Brian successfully capped the increase clause for some clients (“Locked in 2%, can’t raise to 3% for me.” – 17:50)
• Transfer Fees: Negotiate fee types (fixed vs. percentage), caps, or limits if acquisition goals are part of your growth.

C. Startup Costs (17:13–19:08)

• Generally, franchise fees are fixed to protect disclosure requirements, but setup-related or training fees may be flexible.
• Always clarify exactly what is being provided in exchange for setup or training fees.

D. Development Timeline (19:09–22:55)

• For multi-unit deals: Timelines define your schedule for opening new units; failure can incur penalties or losing locations.
• Common negotiation points:
  • Extend deadlines to 18 months per location instead of the standard 12.
  • Backload schedule: fewer openings early, more as experience grows.
  • Performance-based timeline tied to revenue/profit instead of fixed calendar date.

3. Avoid Catastrophic Mistakes: Liquidated Damages

(22:56–29:04)

• Definition: Pre-determined penalty if you terminate early or are terminated for cause.
• Formula: Average monthly royalty × months left on agreement (can be huge).
• Personal Story:
  • Brian faced a $900,000 threat from liquidated damages when a failing franchise almost bankrupted him:

    “I just wanted to shut it down, walk away. And I had no idea about liquidated damages until I told the franchisor my plan... they threatened to sue me for almost $900,000.” (Brian, 24:03)

• Strategies:
  • Attempt to eliminate liquidated damages.
  • Cap at, say, 12–36 months of royalties or a fixed dollar amount.
  • Negotiate sliding scales over the life of the agreement.
  • Secure exceptions for health issues, losses, or events outside your control.
• Due Diligence:
  • Run from brands with many franchisee lawsuits in FDD Item 3, especially for liquidated damages.

4. Best Practices When Negotiating Franchise Agreements

(29:05–44:06)

A. Emerging vs. Legacy Brands (29:06–32:20)

• Emerging Brands:
  • More flexible, negotiable, but higher risk due to lack of history.
  • Opportunity for larger/better territories, potentially more influence.
• Legacy Brands:
  • More stable, proven, but far less open to negotiation.

  "A lot of times their position is take it or leave it." (Brian, 31:40)

B. Hiring a Franchise Attorney (32:21–38:18)

• Hire a specialist (“Not your neighbor’s cousin who did your will 10 years ago”).
• They ensure you understand what you’re signing, not to negotiate for you.
• Key Legal Areas:
  • Personal guarantees (attempt to minimize exposure)
  • Termination clauses (avoid overly harsh terms)
  • Renewal rights (ensure you can continue if performing)
  • Transfer rights (when/if you want to sell)
  • Dispute resolution process (arbitration, mediation, lawsuit, etc.)

C. Approach to Negotiation (38:19–44:06)

• Relationship-driven: Handle all communications yourself; build rapport and credibility with franchisor leadership.
• Preparation: List all negotiation requests in advance in a clear, concise document.
• Reasoning: Explain requests clearly—why they’re good for both sides.
• Professionalism: “Don’t be annoying”—the franchisor can reject you for being a potential headache, even if you’re financially qualified.
• Expectations:
  • Don’t expect to get everything (or anything).
  • Don’t personalize “no” responses.
  • After negotiations, honestly assess if your long-term goals can be achieved within the offered agreement.

    “If it’s no, then you know you probably have to move on and find another option.” (Brian, 43:50)

• Big Picture: Agreements are written to protect the brand’s reputation and operation—ultimately, what top performers want.

Notable Quotes & Moments

• On negotiation leverage:

  “The more territories you’re buying, the more leverage you will have here.” (Brian, 06:21)

• On minimum royalty negotiation:

  “You could try to get these minimums eliminated, reduced, or extend the time frame... probably have the most luck on pushing back the date.” (Brian, 17:00)

• On his costly mistake:

  “I just wanted to shut it down, walk away... they threatened to sue me for almost $900,000.” (Brian, 24:03)

• On attorney selection:

  “Do not hire your neighbor’s cousins’ brother... hire an experienced franchise attorney.” (Brian, 33:00)

• On the importance of reputation:

  “You can have perfect financials... but if you come across as someone who’s going to be a headache, they may decide that you’re not worth it.” (Brian, 41:12)

• On franchise agreements:

  “Franchise agreements ultimately benefit the best performers.” (Brian, 44:01)

Timestamps for Key Segments

• 00:55–09:10 – Territory Negotiation: What you can (and can’t) get
• 12:15 – Protected Radius Example
• 09:11–17:12 – Fees: Royalty, Brand Fund, Transfer, and Minimums
• 17:13–19:08 – Startup Costs: What’s flexible
• 19:09–22:55 – Multi-Unit Development Timelines: Don’t overcommit
• 22:56–29:04 – Liquidated Damages: Avoiding financial disaster
• 29:05–32:20 – How Brand Age Changes Negotiation
• 32:21–38:18 – Franchise Attorney: Why and What to Expect
• 38:19–44:06 – Best Negotiation Practices: Relationship, preparation, professionalism

Final Takeaways

Brian Beers’ candid advice demystifies what’s truly negotiable in franchise agreements, emphasizes the value of due diligence and legal review, and warns of catastrophic missteps (like underestimating liquidated damages). Aspiring franchisees are urged to focus on building professional, honest relationships with franchisors, to approach negotiations with clarity, and to recognize the ultimate goal: a deal that supports long-term wealth and freedom while safeguarding against costly errors.

If you’re considering a franchise, this episode is required listening—and an actionable blueprint for your next deal.