I almost made a $500k mistake.
We found an auto shop for sale in Philly.
Great location. Major road. High traffic.
Close to 3 of my existing stores.
Seemed like a no-brainer.
I sent it to Midas corporate for analysis.
They came back with bad news: “This location will cannibalize $500k in revenue from your other stores. Plus it’ll could be one of your lowest-volume shops.”
We passed immediately.
Here’s the crazy part….
Midas corporate just cost themselves a $20k franchise fee plus 20 years of royalties by telling me not to buy it.
But they don’t care about short-term cash.
They care about my long-term success.
This is what separates great franchisors from garbage ones
The bad franchisors sell as many units as possible before flipping to private equity.
The great franchisors protect their franchisees’ profitability even when it costs them money in the short term
The litmus test for any franchise system:
- Do existing franchisees want to buy more locations?
- Will corporate reject candidates who aren’t a good fit?
- Do they have real estate criteria that prioritize your success over their fees?
A franchise system that tells you “no” to protect your cash is worth 10x more than one that takes your money and wishes you luck.
Cheers!
Brian
P.S. Want the specific due diligence framework I use to evaluate franchisors?
Respond “QUESTIONS” + tell me where you’re at in your franchising journey
