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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.
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In the franchise world, you see a lot like there's these two sides of it where you've got a lot of people who get in the business and you essentially they buy themselves a job, they get started, they're in it every day, they have trouble really removing themselves. And I would say that's the bulk of franchisees. When you survey it out and you see all these stats, a lot of people really just have trouble growing it. And then you've got on this total other spectrum, there's Greg Flynn in the Flynn Group. We've got, I don't know, it's like 4,000 locations, right? And they've just built this massive business through franchising. And even in my world, in Midas, we're now the fourth largest franchisee, something that range, we have 35 locations in our brand. But two thirds of the franchisees even in Midas, are single unit operators, right? And so kind of like you can look at the industry and be like, all right, 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 two thirds stays really small. And then there's this group of people who are able to make something really big. And so that's kind of what I want to talk about today is kind of how you can go from, you know, kind of starting small, starting where everyone is, and then, you know, primarily through growth, through acquisition, start to acquire other franchisees and then also to open up new territories too and continue to develop. And I think those are the two sides we have. And 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 rollups, we're talking about acquiring other locations. When I look at my history of it, we've grown from two locations that we bought in 2016 to the 35 that I own today. And franchising is kind of like this two sided sword because on one case we can get into it. We all have to sign these contracts. The whole point of 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 keeps you in the business. Like, we can't just close it up and walk away. We're contractually obligated to continue the operations or sell or sell that contract to somebody else to continue to operate it. And so once you become a franchisee, the easiest way for you to get out of the business 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. They're already approved by the brand, they're already operating. And so the buyer. So in this case, if everyone here is. Is trying to execute this model, say, hey, how do we grow through acquisition? How do we buy other franchises? You're on the other end of that spectrum, right, where you're also a franchisee. You signed this contract, but now you are acquiring it from other people, right? You're essentially in some cases buying their problem, right? That then it's on you to then fix it up. And so, 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 whatever reason, and you can become that de facto person that they go to. 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 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. How do we spot some of those opportunities and how do we go about it from the strategy to say, all right, I'm here, and then what direction do I want to grow this thing? This is kind of how I think about it. This is kind of like our sales history. I've shared this before in 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 kind of really built the foundation. One. One basically one store per year for a number of years before we really got our footing. We really gained confidence in our Then ability, my ability to be able to say, hey, 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 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 all of Philadelphia going into New Jersey, which, you know, it's like an hour away or an hour and a half. It's not like it's a plane ride. 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, 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 and then can continue to kind of fill it in. And so, you know, we've had this massive growth over really just the last three years, but it started back then. So for anybody who's just getting started out, don't. A lot of growth can happen way quicker than you think. A lot of times our brains think in linear terms. We think, oh, I'm growing 20% a year. And I'm just going to assume because I grew at 20% in the past, I'm going to grow 20% in the future. 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, integrate it and buy two and then three and then four, 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, I feel that we have the operational expertise now and, and the teams and the systems to be able to do that, to double overnight, to go to 50 to 100.