I met a multi-unit franchise owner who’s crushing it.
He’s only a few years into the business but has cracked the code.
His average location does $2M compared to the system average of $1.0M.
He asked about a potential acquisition that sits right in the middle of his footprint.
Existing franchise with very low sales ($600k/year) and TERRIBLE reputation (2.9 on Google).
The seller wants $250,000. He offered $25,000.
They’re at a standstill.
Here’s what I told him:
I agree $250k is overpaying.
But if the seller is stuck on that number, let’s figure out how to make it work.
Start with seller financing.
$50,000 down + $2,000/month for 100 months = $250,000 total (principal + interest).
The seller gets his number.
My buddy gets into the shop for $50,000 in cash.
He’ll need another $100,000 to bring it up to brand standards — but he’d have to spend that either way.
All in: $150,000.
Given his track record, he’ll get the store to $1.2M in the first 12 months and cash flow ~$150,000.
That’s a 100% return on year one, with the cash flow growing from there.
Compare it to the alternatives:
- $140k in the stock market at 10% = $14,000/year
- Real estate returns even less
Yes, it’s apples to oranges. Yes, it takes work. Yes, there’s risk.
But for great operators, a lot of that work & risk is nullified by the systems they already have in place.
Then acquisitions like this turn into incredible investments
Cheers!
Brian
