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Buying an existing franchise sounds like the ultimate deal. You get a team in place, you have brand recognition, you have cash flow from day one. And then you can walk in there with your owner's hat and start making changes that put more money in your pocket. And I can tell you after buying over 30 franchises, I've learned a few things and today I want to share with you how to find killer deals, how to avoid the losers and the three non negotiables that I look for in every franchise deal. But the first thing that we have to understand about franchises is they're special. And that when you join a franchise, you become the member of this like private club where everyone who has joined has like signed their name in blood. And there is this special bond between us because as franchisees, like, I'm in Midas, I'm in that one painter, I'm in Waterloo turf today, like those three brands and partners in others. And in each one of those brands, like, like, I may not know the other franchisees that, that well, but like when we meet at a conference or when we meet to get coffee or whatever it is, like, we instantly have a ton of stuff that we are like, brother, there's like a brotherhood to it, right? Because both of us are building the exact same business for ourselves and sharing in the name and the systems in the process. And once you understand that, that there is this like tight knit community that franchisees, when they want to sell, they want to sell to other franchisees. You know, of all the deals I bought, it's around 30 of our 35 Midas shops that I own. About 30 of them were deals, existing franchises that I bought. You know, in this roll up strategy, you want to know how many of them hit the open market. That went through a broker one, and that was in 2017. That was the second deal. I did every other deal. So 29 other deals, there was not a single broker involved. They never went to market. You want to know of the 30 deals that I've done, how many had other buyers that I had to like outbid and compete? 0. At least that I'm aware of. There could have been others, but they weren't like, hey, here's his offer. Let me see your offer. Best and final. Do it this date. None of that shit, right? It's because when you join a franchise network and when you are like me and you can establish a relationship and a reputation and you're a top performer, that, that like when people want to sell, they don't want to sell to some Outsider. They don't want to deal with a bunch of like, bullshit listings and biz by sell and like extreme due diligence and all that stuff. You know what they want? They want to get the deal done. Number one. That is the most thing if you ever got sold a business before. And I've, I've sold two now. Like, it sucks, right? Because you can, you get all excited that, like, hey, I got this great opportunity, I got this guy, you know, and then they ask all these questions, it's uncomfortable. They have to go meet your team and you're like, lying about what they're there and all this stuff, and then get to the finish line when they back out, right? They can't get the financing. They realize it's not for them. They, they or their other better deal went through. And then you're like, oh, fuck, I gotta start all over again, right? And like, a lot of people don't want to go through that. And when you are a franchisee and they come to me and I'm another franchisee and they know me and they know that I've done 30 other deals and that if I say I'm going to do this deal, like it's going to happen, I can take a ton of relief off of them. And so they will want to do the deal with me because it's easy, it's quicker. My due diligence, embarrassingly, is extremely minimal because I'm buying a business that I already know in a system that I'm already familiar with, that I've been with for many years. There's not a lot of, like, stones to uncover because I just know when I get in there, like, this is what's going to happen. I've done it 35 other times with all my stores. Like, what's one more? And so franchisees want to sell to other franchisees. So this is just like super important to understand if you are trying to grow in the franchise business. And I want to talk about this in two different ways. The first way is if you're an existing franchisee listening to this and saying, okay, I'm a franchisee, I want to grow. What I would implore you to do is start making relationships with other franchisees in your network. Get to know everybody, get involved in the franchise advisory committee, go to all the conventions, go to the regional meetings, reach out to people and just say, hey, my name is Brian. I'm working and growing. You know, how can I help you? I want to share some things that are working for me right look to add value. Because you do that, you start to build this reputation. You start to be known, you start to build friendships. And guess what? When you want to grow, they're going to call you. You're going to get first stab at it. And if you can make the numbers work, you're going to have a deal. And the more deals you do, the easier they become. And so I have learned that over and over again over the past number of years in growing our business in the Midas business to 35 stores, we'll do 50 million in revenue. Now we're growing in other lines of home service and that one painter and water the turf. And I've got a towing business, I've got all these other businesses. But the core of it all started by building these relationships. Now if you don't own a franchise and you're saying, well, I want to buy one of these, I want to get my foot in the door. I want a profitable resale deal like Brian gets a couple things. One is that you need your foot in the door with a single location. Once you get your foot in the door to a franchise, you become a member of a club. And it doesn't matter if you have one location or 100 locations, you're a member of the club. It's just a binary, yes, no, you in or not. And so sometimes the best way to get your foot in the door is any way that you can, whether that means it's a new franchise or a new territory. Say, hey, I'm going to open up a brand new store, a green Greenfield territory. And then once I get my foot in the door, that opens up right to all these acquisition opportunities. Another is you are buying one of these publicly listed franchises that's for sale that is on Biz by sell. Right? That. Keep in mind, none of the local franchisees wanted to buy that. If it gets to Biz by Sell, if it gets to your inbox, it's because no one else who is an existing franchisee wanted to buy it. That immediately should raise red flags in your head that you need to then start working through to think through, okay, well, why didn't anybody want to buy this? Right? And this is the thing that you really have to go through. And I'll say if I'm you, but if I've like personally done this, because I have vetted multiple brands that I was looking to to get into through a resale and asking myself these very questions, which is like, why didn't anybody want this? Right? And so that's the first question and what I would start with is the top level, which is the brand itself, which is okay, let me look into this brand, this franchise or to find out how are they doing, right. Is this a brand that is on their way up and that is growing? Are they really small and there's only like a handful of franchisees. Is it a big legacy brand like some sort of neighborly brand like a Mr. Handyman or like whatever Maids Maids thing. Is it a brand that's on the fall? Right. There have been some, you know, orange theories that are closing down. There's cycle bars, there used to be a million frozen yogurts. You know, cookies are a big. If it's not named crumble cookie and it's anything else. Right. I would be a little concerned if their unit counts are going down and everyone in the brand or there's there's some macro level things that people are saying, listen, I don't want to buy. Like I'm just trying to figure out what the hell to do with mine. Right. So that is the first place to start is, is what is up with the. And would you buy into that brand if that wasn't that resale opportunity? Like that has to check the box. As one of my non negotiables is that the brand has to be a good brand that you would buy regardless of being a resale or not. Because it has all the qualities that we look for in a great franchise which are they prioritize franchisee profitability which means their franchisees are happy, they're profitable, they're growing. Like they have great systems in process that like actually, like you can actually run with it versus other franchises that really have weak stuff and you're really on your own and that the franchisor really wants people to grow and they, they, they are really in creating the sense of community among the franchisees. And I have whole other videos on like how to bet franchisors. I don't want to get into that totally. But it is something that we really want to look for. Okay. So that's the first thing I look for is is it a good brand? The second thing I want to look for is then why do other franchisees not want to buy this thing? So a couple years ago I had a friend, well who was somebody who became a friend reach out to me and said hey, I want to help find a franchise. I'm looking for a senior care business. You really want to get in senior care. And one of my help finding it, you know, I Have a team of more franchise brokers. So basically, we go out and we help people find franchises new and resale and help, you know, people get into business. And so we worked with them. Literally the day after we have coffee, a resale popped up into our portal. And it was a senior care business that was for sale literally in our backyard. Like, totally amazing opportunity. And it was so good that I decided to partner with him. So I put some money in a deal and some advisory part of it and have helped him kind of get into this thing. And it was a great brand, it was a great territory, and it was, you know, profitable, right? So it like, hit all the things and we're like, what the heck is wrong with this? Like, why isn't anybody else buying this? Like, this is literally what we're going through here. It was because it was an older brand, been around for. For many years. And the territory that we bought, the franchisee was one of the original founding franchisees. Like, he'd been in it for 20 years. Well, guess what. Well, all the other franchisees around him were. Have also been in it for a very long time. And all three, four, whatever it is, they're all thinking about retirement as well. But they're doing well, they're profitable, but they're on the backside of their. Their career, right? They're not looking to grow. They're thinking, hey, over the next five years, like, I want to sell too. Like, I want to sell like he did. And so that actually became a really great opportunity for. For us and mainly for my partner. But that we were able to get into this thing, profitable cash in our backyard. And we have now opportunities to acquire our neighboring franchisees. You know, they don't want to sell today, but that's fine because we're laying. We're laying that we're planting those seeds and we're letting those. Those things grow. And so that is something that is like the best scenario, right? Great brand, great territory, all this stuff, and everybody else is going to want to sell, too. So from there, I look at the location or the territory, like, the physical location of why does anybody else want this? Now, in some businesses, the location itself can drive like 80 to 90% of its success. Years ago, we looked in the Little Caesars as a franchise, and it was like the location you picked up literally determine if you would be successful or not. And if you picked a bad location, even if you're the best operator in the world, you're almost destined to fail. And so it's possible that the Business that you're looking on biz myself is just a terrible location. They just picked the wrong spot. They should have been in the shopping center and they're in this one instead that is like across the street. But they don't get the same traffic, they don't have the same co tenant and all that stuff. And they have basically saying, hey this, like I can't make this work and I'm going to sell it. And you may think that you're going to get into that thing and you are going to like work at 247 and you're going to do all stuff and you're going to make it successful. But it's possible that because you picked a bad location, you're only going to get it better by 20% or something. Like you're not going to get it to the point where this thing really makes it worth it. And what really is, is like that place just needs to close down. You need to relocate it over there. But then it's like the cost to do that. Is it, is it cost prohibitive? And so I would be really looking into that. Another option is that a franchise seller just has a price that they want that no other franchisees are willing to pay. Like they're out of their mind in terms of what they think this thing worth and they're just like fishing out there to see if some sucker will buy. And if they do good, good for them. But if not, you know, it's going to come back to reality then the local franchisees would be interested. And so anyway, those are all the things that I would be looking for as an outsider to determine if it is something that I'm looking to do to get into this resale. Okay, so now let's get into my three non negotiables. Number one, I already covered a great brand. Number two is a great location. As I just mentioned. However, there's a caveat to this which is, you know, sometimes people really want to push the envelope because they want that deal. You know, I had this guy we were working with and he had been searching for like two years to buy a existing cash flowing business and he really didn't want to start a new one and he really wants something to go and you know, he had his whole list like his buy box. I think it's really important that anybody looking to buy into a franchise or business creates a buy box, right? Which is like, you know, I'm going to hit the, I'm going to hit it right down that, right down the center it's my strike in terms of the type of business model I want or don't want, my budget, the type of skills like legacy versus emerging. Like there's a whole bunch of things you really want to kind of get into to say, if I find a franchise or an opportunity that is within this box, like I am, I'm going to be going all in on this thing and if it's outside, I'm going to ignore it. And so he had, you know, a buy box and he was really strict on it and he just couldn't find anything right. And so then his buy box kept getting bigger and bigger until I was like, hell, I'll just like buy anything that I could afford. And so he got this opportunity, it was an hour from where he lived with a mediocre brand and a mediocre like deal. And he was like really serious about this thing. And my thing to him was like, the location matters a lot. And when you start this thing and you say, hey, I'm like taking out an SBA loan, I'm going all into this thing, you're going to eat, sleep and breathe the business. And for me, I would want that location as close to my house as possible. Because you're gonna be in there a lot. And if you have to drive an hour there and an hour back, like, and you miss your kissing your kids goodbye in the morning because you gotta beat the morning rush. And then by the time you come home, it's like 6:30, 7 o', clock, your kids are tired, everybody's grumpy and you're hungry and you had this long day and then you barely get to spend time with your kids and your wife before everyone's going to bed and going back to it all. And then in the car you're just like, can't get any work done unless you, you know, have a self driving Tesla or whatever for now. But you know, you're just like drained. And then it's like not fun. And then you get into a business that like, it's just mediocre. And it's like the brand's not that good and the opportunity is not that big. And so all of a sudden, like you've made this tremendous amount of sacrifice, not only in money, but in the time that you have with your family for an opportunity that is not that good because you're desperate to get in the game and you've been waiting for so long and you just want to get at it. And then after six months, 12 months, and maybe it's doing better. And maybe you are making money but you hate your life because you're like, this sucks and why did I sign up for this thing? And now you're looking to get out of it and then start the search process all over again and you're back to where you started. And so if you're looking for that resale, I would just like be tight on what you want and really don't try to like put the square peg into the round hole or whatever. And for something that that you shouldn't do just because you're trying to get a deal, like I'd rather see you take a little bit longer and spend the time or you know, explore the new opportunities or you know, do something that kind of gets you into finding the best deal that you can. And then finally, my third non negotiable is the deal itself. If you are a new to the game and you don't own a franchise or even if you do but you're still early on, you definitely want a successful, by all means, well, profitable business that you're buying, okay? Don't buy a turnaround if you don't know what you're doing. I have bought many, many deals, right? I've bought some that were extremely profitable and doing great. And I have bought some that were complete dumpster fires as part of, you know, some package deals. And you know, I have this one store that has Taken it's lost $100,000 for, you know, three years in a row. So I've lost over $300,000 in this store. It's because it had such bad reputation, so many managers and we painted it and we put better people in and we spent a bunch of money in marketing and it like it is doing better now. Like we are now profitable. We haven't recouped all 300, but like it is on that path. But it took us such a long time. And the thing is like, if that was my first location or if that was my second location I bought, I mean, man, I don't know if I'd be here today in with the size of the business I have because that one would have taken the life out of me. It would have wiped out all my profits. I'd still be trying to like get caught up for that one because it was in such bad shape. And I would have thought, I can do it. I have this big ego, right? And sometimes, at least in some businesses that are extremely reputation driven, like auto repair is, right? Like if someone rips you off, you're like A bad mechanic or whatever. Like you tell everybody, every guy on my comments in UTP who, like, said he was never going to go on my district again because of something that happened 30 years ago. And so, like, if that happens enough, like, it could really hurt your reputation and community. And it's a question of, like, how long you do. You have to be able to withstand that. And so I would take that all into consideration as part of it. So you really want to find something that's a great deal, that's profitable today, that's priced based on its current performance, not its potential, and that covers your debt payments. It covers. And you're profitable and all this stuff. Because at the end of the day, if you're not, if you're buying a turnaround that's losing money, you have to do a ton of rebuild. Like, why are you paying for, like, there's no value in that. You might as well just start something new from the ground up where you build it from zero. And you can establish a great reputation from day one. And you can do it right. Like, yes, you're starting from zero sales, but you may be able to get to a much quicker, much more profitable path quicker than you can if you buy an existing failing franchise that has a ton of reputation that you have to rebuild. That's what I would think through as all that. And so buying existing franchises is a huge opportunity, I think. You know, I made a ton of money. It's. My entire business is built upon resales to begin with. But the key is you've got to get your foot in the door, because the only way you get the great deals, if you're an existing franchisee and you build relationships and you build networks and you have this synergy, and so your goal is just to get your foot in the door and then your whole entire world opens. And so you can get that in through buying one of these resales that you just make sure it doesn't have, like too much hair on it. Or finally you can just cold call people, right? You can just pick up the fdd, go to one of the exhibits, you find the list of every franchisee, and you just start calling them and saying, hey, I'm looking to buy a Midas in Philadelphia, whatever, like a Meineke in Charlotte, wherever you're at. And you never know, you may find someone who, who wants to sell and you know, maybe they like you enough when you cold call them that you set up the meeting, that you continue the conversation. And you never know, you may be able to find some off market deals by making a ton of calls. It's a lot of work. Most people aren't cut out to do that, but it is an option. I know people who have done it. And so anyway, let me know what you think about existing franchise resales. If you have any questions on how to validate, how to do it, all this stuff, just drop them and I'm happy to help you and I'll see you on the next one. Cheers.