Host: You probably skipped right over that franchise location you saw in Biz buy sell doing $100,000 in SDE. Way too small, right? And it's a franchise which maybe isn't so exciting. Well, maybe there's a possibility there a playbook that is exciting and decidedly not small. And that playbook is of course buying that first location as an entree into the franchise brand with a plan to then acquire more, maybe many more. Brian Beers is an advocate of this playbook, having had lots of success with it himself. Brian and his brother started acquiring Midas locations in 2016. Today they own 30 of them that together do $36 million a year in revenue. In this interview, we break down how he did it and we draw out his principles for you to apply in your own path to acquire a business or maybe acquire a franchise empire. Here is Brian Beerse. Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this podcast I talk to the people who do it. August Felker is a two time successful searcher, first with a traditional search fund. The second time around he did a self funded search. Today August runs Oberle Risk Strategies, an insurance firm with a dedicated practice group for searchers and acquisition entrepreneurs like you. If you've got a business under loi, Oberle will provide complimentary due diligence on that business's insurance and benefits program. A great no risk way to get to know August and team. They love helping searchers. They've worked with hundreds. Oberle is a specialty insurance brokerage for searchers by a former searcher. Check out oberly-risk.com O B E R L E- risk.com link in the show notes. Brian Beers. Thank you for joining me today on Acquiring Minds.

Guest: Yeah, thanks for having me.

Host: Brian, you're the owner of dozens of Midas locations in Pennsylvania around the Philly metro area. And you've recently been a leading voice, at least on my radar, of the benefits of franchises. So I wanted to have you want to delve more into that topic for this audience, the acquisition entrepreneur searcher audience, many of whom will have had contact with franchise businesses for sale, existing franchise locations for sale. But before we dive into that, let's get a little bit of background on you. Elaborate on these dozens of Midas locations that you have and we'll go from there.

Guest: Yeah, sure. So yeah, I'm 35 years old in Philadelphia as of today. My brother and I operate 30 Midas franchises in Philly and then we also part of the expansion was into north central New Jersey and suburb about an hour north of Philippines. So that's kind of our radius. How we got into it was it's a family business. My dad got in in 1976 when he was 22 years old with his dad. So I'm like, I guess, technically third generation. And he. He went through the process of opening new locations, acquiring existing locations. Him and my uncle, you know, kind of at its peak, had anywhere between like, six to eight locations, all in Philly. And, you know, after college, I. Business wasn't doing too great, and I decided I'd. I'd join and give it a shot and see if I could, you know, have a positive impact. And so I. That's what I did. I joined and started learning and, you know, helped grow the sales. And in 2016, we decided, you know, we want to make more money. And my dad owned the company, so the only way that was possible is if we had more locations that, you know, my brother and I own. So we went out and started buying additional locations. So we bought two and then another one, another two, another three, five, seven. Just kind of, you know, group by group started swooping them up and, you know, eventually bought my dad and uncle out. And here we are today.

[4:09] Host: Okay, and so you started that acquisition path in 2016. How many years had you been in the business under your dad at that point?

Guest: Six years.

Host: How well did you know? So you knew what?

Guest: Yeah.

Host: Wow. Okay, so six years. You knew it really well.

Guest: Six years. I was, you know, growing the business. He. I was pretty much running the company at that point. And, yeah, decided, you know, it was the only way we could grow. And, um, so, yeah, we started. Started then.

Host: So you were running the company, but it was still your dad's. You and your brother started buying businesses. And at some point, not first, you didn't buy your dad out first. You did. You kind of circled back around to do him.

Guest: Yeah, we had to buy him 20. We had probably around 20 or so under our, like, separate entity that we own. And then we were able to, you know, have enough money to put together a deal. So.

Host: Great. And so how many locations do you have now?

Guest: Did you say today we have 30.

Host: 30. Great. And give us a sense of scale by revenue, if you can. And what does profitability look like for a Midas franchise?

Guest: Yeah, so we'll do about 36 million are like, run rate on sales, and we've about 200 employees between the locations and how much money you can make it really depends. We're probably in the, I don't know, 10% ish kind of range. Our best locations, though, can make 20, like they crush it. Or worst locations can lose 100 grand.

Host: So. Okay, well, Brian, give people, as I said, you know, you've kind of become this voice out there for the benefits of franchising. Give people that, that pitch, for lack of a better word.

Guest: Yeah, I mean, there's a number of benefits. You know, a big part of it, I think is, I don't know, the ability you have to scale very quickly, you know, at least in. It depends. It all depends on the brand and stuff. But if we're talking about guys who are interested in the acquisition side of it, you know, there's tons of franchises out there, tons of people that get into them and want out, they want to retire. And like, if you're young and energetic and, you know, you're a good operator, like, you know, there's tons of opportunity. And so, you know, if I was running Beers, Tire and Auto, or whatever it would be called as an independent business, I mean, it would be. I would be nowhere close to where I'm at today in terms of, you know, the size of the company, the money we make, you know, my lifestyle. To be able to surround myself with, you know, a really good leadership team who can handle a lot of the day to day, that gives me freedom. I mean, all that comes, you know, the sales and volume. And I think in a franchise system, the ability to grow relatively quickly is, is, is what I, you know, is my big pitch. And you know, why I talk about it.

[6:46] Host: And to be absolutely clear, you're talking about growing through acquisition.

Guest: Yeah, we have, we opened two new locations, but not all of them. Besides that were. Yeah, through acquisitions.

Host: Because if you are in a mature franchise system, which Midas is decades old, really your only way to grow territories or locations is by acquiring. Because there won't be much green space, if any left.

Guest: Well, it depends. So in Midas case, there's still a ton. Like, people don't drive more than the zip code they're in to get their cars fixed. Like 80% of our business comes from the zip code we're in, plus maybe one more. And so like I have locations that are 10 or 15 minutes apart that have zero competition from each other. So I mean, I could, I could probably fill in another 30 locations in our existing market. Like, at least in Midas's case, that's not really a problem. The issue more in our case is, is finding real estate Is, you know, in prime retail locations that's 4,000 square foot, that's zoned for automotive. All that makes all that's very difficult. So especially as an independent to try to compete with like, you know, what Midas is wanting, what Pep Boys and Mavis and Firestone and all the, all the guys are competing pretty much for that same kind of prototype. So that's the issue. But in, yeah, in other businesses, especially ones that are territory based where Midas isn't, it's because it's location based. Yeah, the mature ones, a lot of them are scooped up or what's left is like, you know, maybe not desirable markets.

Host: Well, let, let's steel man this argument. So there many people in my audience, many searchers, many business people in general have, for lack of a better phrase, kind of an anti franchise bias. They don't like them for a variety of reasons. Maybe they think, you know, the business in a box thing, while attractive, can also feel like, you know, you can't bring your creativity to the table as much. You know, you're not, you're not as much of your own man or woman as you want to be. That might all be kind of perceived, but then there's the very real fact of you are going into business with a franchisor. So that introduces kind of another party into the, into the equation of your business, which there can be risk there, there can also of course be benefit. So address a few of those, please.

Guest: Yeah, so yeah, when you first of all, the box. So, so you're going to buy a business in a box, you get a proven business model, you get a marketing plan, you get a support system, you get training, you get all this stuff. That's the benefit. The bad side is you have to live in that box like you only can provide products and services that the franchisor approves of and that fit within their business model. For example, at Midas, if I decided I wanted to start doing bodywork or I want to market like we do car stereos and all this stuff, like, I mean some of it I probably could do as one offs. Like they're not, they're not gonna kill me over it. But you know, if I want to go on the radio and start talking about it like that'd be a problem because there's other franchisees, you know, in that market that aren't going to do those things. And then that makes the brand, you know, kind of degrades the value of the brand. And so yeah, you have to play by the rules now it really depends on, you know, is that the type of person you want to be? So for me, like, I'm not to say I'm not creative. I'm pretty creative. But, like, I don't need to go out there and like, invent a new problem or solve something. I'm more like execution and operation. So I think for people that are really good at, like, just here's the playbook, go and run it. Like, for those people, like Fran, I think franchising is a great fit. But if you're one that, like, doesn't want to play by the rules and you want to always come up with a new problem and try to find these new challenges to solve, you know, yeah, it's probably. Probably not the right fit. But if you like solving challenges or like, how do we serve more customers, how do I improve my profitability, how do we drive more sales, like, problems that live within this box, then yeah, I mean, franchising can be great.

[10:30] Host: And in your own experience, have you ever. And if so, how many times chafed against your friendship, the franchise or.

Guest: Yeah, it happened last week. I wanted to try a. There's tons. So in real estate, right? There's. There's tons and tons of these in the Northeast. Here in Philadelphia, there's tons of these small, like three bay service stations, right? So it's a gas station and have like a three bay, three bays, right? There's tons of them. And so I kind of thought, hey, if we could like operate a mitre shop out of one of these three bay garages, you know, overheads, very low, employee count would be low. Everything would just be low sales lower too. But, you know, if we could put. Put up a bunch of these satellite stores and then, you know, not far from existing stores, I could funnel work to whatever the overflow was. So that was my concept. And I've been thinking about this thing for years. And in previous leadership, they were open to it, open to this idea. In current leadership, they. They denied it and said. Told me no because they didn't like the idea of an active gas station and liability and stuff, even though we wouldn't be running the gas station. So anyhow, I'm. I guess I'm off that bucket and now off on onto something else. But, you know, and then there's like, you know, what's the future of the business side of it? Like, I don't know, there's this whole thing of, you know, obviously EVs and all this stuff, which I'm, you know. Yeah, I don't really believe is going to be a problem in my lifetime, at least for a while. And so, but there is this question of what, what markets do we attack next? You know, and you know, I'm, I'm in favor of going after Glass, right? Glass is a huge market. There's tons of, there's, there's tons of opportunity out there. But like that's the kind of thing that the franchisor, we want to change the business model or slash add a new service line. That's something the franchisor really has to get on board and they have to lead it. But when we get into like creativity side, you know, it's a partnership like you said. And one of the big things I always recommend to people is, you know, figuring out like to what degree does the franchisor take input from the franchisees. And so there's some franchise like Midas is actually very good in terms of wanting feedback from franchisees, wanting ideas like what are best practices, what is working and then the best ideas get spread throughout the system. So I've, I've had a number of things that we've kind of started here that or we took an idea and perfected it or perfected the execution of the idea that Midas has then kind of taken hold and other people are doing across the country. And so I think your creativity is kind of within the reins of how do we execute the existing system better and then does the franchisor take those ideas and work them into their new playbook? And so I think the more kind of there, there's that two way street feedback, the better it is for the franchise system and the franchisees to be have access to kind of the best practices from around the country.

[13:23] Host: And if somebody is considering buying into a franchise system and they're talking to other franchisees, that's something that they should ask. How receptive to, how receptive, how receptive

Guest: are they to new ideas? The other thing you can find out is if they have what's called a franchise advisory committee or a facility for short, which is basically kind of like, so I'm on the fact for Midas and it's kind of like, you know, the top guys in the country, not you know, obviously the, usually the biggest franchisees are on it because they kind of have the most influence. But normally they like to have a mix of some of the biggest ones, some medium sized and some smaller one that kind of matches the, you know, kind of the makeup of the, of the franchise E base. And so, you know, we Meet quarterly or so and we have different committees and like, it's really a good partnership to figure out, you know, like I'm on the new store growth committee. So I'm working with franchise development and other franchisees and real estate to talk about how do we grow rooftop locations, how do we make Midas a more attractive place for franchisees to come. There's people who are on advertising, there's people who are on operations, profitability. And so, you know, a newer franchise system may not have that just because, you know, they're kind of small and they just, you know, they're just, they got a lot to figure out. But most of your older established ones are most likely going to have one. If they don't, like I'd be a question of, well, why don't you have it? How do you get feedback from franchisees, you know, et cetera.

Host: Great. And just on this point about creativity before we move on. So one of the kind of big areas of creativity within any business is the marketing. Like how do you drive demand for your product or service? But I would imagine that that's one of the places where a franchisee is most hamstrung because they, the franchisor is going to be ultra protective of the brand because that's really part of the value of what you're buying with your franchise fees and that's what all the other franchisees are going to care about and that consistency and so on. So it would seem like the marketing, which traditionally is where there's a lot of creativity, would actually be pretty, there would be pretty tight guardrails, respond to that. And, and as a follow up, you said, you know, you can have creativity in driving sales. So how does a franchisee drive sales if not with creative marketing?

[15:28] Guest: Sure, yeah. So the marketing side, like in our case, you know, they work with a market agency. They have like pre canned, you know, things you can say. So you say, hey, I want to do direct mail and I want to drive tires. They say, great. Here are like 20 different options you have on what you can say or do, or brakes or air conditioning or, you know, in our case, I guess this leads back to how do we drive sales. We're really big into consumer financing, so we have a number of programs that allow people to get six to 12 months if they have good credit. And if they have bad credit, we have programs to help people that way too. And so, yeah, so I'm somewhat restricted on what we can do there based off of, you know, what they've approved. But Even then, like I've said, hey, I want to do direct mail advertising promoting our no credit needed programs, right? And so you say, well, we don't have anything. I said, all right, well, can we get something approved? So then I worked with the marketing team through a number of months who go back to Midas legal and like eventually come back with like three options that legal is approved that we're allowed to say. So sometimes the creativity, like, you know, out of the box, you may not be allowed to do it, but, you know, if they work with you on it, a lot of times you can get your message across. As long as, you know, everybody signs off on it. And yeah, so how do we drive sales? So that's a big one for us is that the other things we've tried, like we set up our own call center in the Philippines that, you know, all of our calls kind of got routed to that way. And then we're able to record them and, you know, track our ability to set appointments. You know, a lot of them have to do with kind of the internal process that we, that we follow. Whether it's, you know, we go to sell, like the order that we go, the things that we talk about, like, we've gone through different, like Sandler sales training or Dale Carnegie, like trying to implement some of those practices, but using kind of the Midas way. You know, franchises really, it's kind of the spectrum of how much they control you or want to control you. Some like Midas is kind of on the spectrum of. Not that, not, I'm not gonna say zero control, but minimal control. Like each franchisee runs automotive shops and carries the Midas name. Right? So they like everybody does it a little bit different. Even within my 30 stores, they're all gonna like check out cars a little bit differently. Present build estimates. Present estimates, right. The look and the feel is going to vary widely based on them. Then on the total other end of the spectrum is like a Chick Fil A, which is, you know, kind of not really a franchise. But, but people, people get the point that that's like they are going to have the owner operator there every day and like everything is going to be to a T exactly the same. Right? And then there's lots of franchises that are in the middle. And so part of it depends on, you know, getting into the franchise and really figuring out is it kind of like you are going to follow the system, this is only thing you're going to do, or is it kind of like you're going to run your own business, you're going to share in these shared, you know, brand and advertising benefits, but you kind of have more flexibility too. So there's, there's a spectrum here too.

[18:33] Host: Sure, sure. And that's again, something that when you're considering what franchise brand to become part of that, you need to be asking about figuring that out, how restrictive is the franchisor? And is that something you ask or is that something that just is like, it kind of emerges on its own?

Guest: It really depends. Like, automotive is like there's so many different cars, there's so many things that can go wrong with cars. Like there's so many, you know, range of skill sets of technicians that they kind of have to have flexibility otherwise be, you know, be very difficult. But I mean, if you're like painting houses, like you're painting houses, right? Like, it's not like it's going to be this huge, like, number of things that could come up. I guess there could be different surfaces or like, do we do painting, do we lime washing, do we do insides, outsides? Like there could be some variability there, but it's not going to be the same as automotive.

Host: You've probably heard me mention SM Bash, the conference in Orlando for acquisition entrepreneurs, SMB owners and investors. It was such a valuable event. I met no less than 12 acquiring minds guests there in person, hosts of other podcasts in this space. And if you're on SMB Twitter, it was a who's who of all the biggest accounts. Well, SM Bash is coming back around this time in Austin in April, and I'll definitely be going back. I'm told by the SM Bash team that this year they're going even deeper on content relevant to search, including a focus on finding investors for your acquisition and inviting a lot of investors to attend as well. For serious searchers or those who've recently acquired, SMBash is really the leading event. There are others associated with universities, but as far as I'm aware, this is the biggest and best indie conference for entrepreneurship through acquisition. Check out smbash.com six letters, S M B A S H.com or click the link in the show notes. See you in Austin. And just to be absolutely clear with people, the ability to grow quickly through acquisition is because versus growing through acquisition by buying independent businesses is so frictionless in franchises. Because why paint a picture?

Guest: Yeah, So a couple of reasons. One is as, as an existing franchisee, there's, there's minimal hoops. Hoops you have to jump through. Right. Like if I want to buy another Franchise. I'm already like approved as a franchisee. Corporate has to sign off on it. But you know, in general they're not going to hamper it. As long as you're a good performing person versus like you want to sell to an outsider, you need to like the franchisor has to approve them, they have to go to training. There's like, you know, they're going to have to finance it. There's all these things that are going to happen that could fall through at the last moment and the franchisor is generally going to have a lot more say in terms of do they want this person in the system or not. And just because you found someone who's willing to pay your price doesn't mean that they're going to approve it. And so that's kind of, there's this kind of like guaranteed, you know, buyer component. You know, the other reason is like that, because of that is like franchisees want to sell to other existing franchisees. And I know we're going to get into this a little bit but like generally they're going to go to their neighbor first or somebody who they think would be a good buyer much and they're going to go through all those options before they ever go out to the public. And because of that like you kind of have all these off market private like deals. I mean most of the stores I've purchased have been, you know, only one has been publicly advertised. All the other ones, literally I was the only person talking to them. There was no like bidding competition. There was no, you know, like, like it was just me. And so think about that. You want to try and buy something, you're the only potential buyer and it's like it's your deal to mess up or deny it. And a lot of that is, is you know, it happens over time. Becoming known like, and trusted. Like the franchise is like a, like a country club where eventually everybody kind of knows each other and they know who the good performers are. Because a lot of times corporate shares rankings so you can kind of see who's, you know, who's at the top of the list and who's at the bottom. And you know, over time it's, it's who do you trust? And like if you're going to sell their business, you know, most people, like they care about their employees. They want to kind of hand over the business to somebody who's going to take care of their employees. You know, if you have a track record of not only do you buy other people, you perform well, but generally, like, you have a good reputation within the brand and kind of within employees. All that just makes it an easier transition.

[22:59] Host: And so that's kind of like your access to deals and the ability to buy quickly. But talk about integration, because that's a huge sticking point in all acquisition, but so much less so in franchises. Explain that.

Guest: Yeah, so in every franchise, I mean, it's almost plug and play. I mean, we've bought locations and, you know, literally the point of sale stays the same. The uniforms are still the same, the core processes are the same. Right. Like it's still a Midas, right? So like we can literally switch, like ownership. We buy it on a Monday and the only thing that changes is on Thursday or Friday when they get paid. It's like coming out of a different bank account. And then over time, you know, we have our ways of doing things right, the sales process and the marketing and whatever. But, like, you know, we don't have to start that day one, right. We start to trickle that in as we, as we start to, you know, over time. But, you know, if I was buying an independent business, you know, let alone five in a single day, or seven in a day, or 20 in a day, you know, think about, you're going to have different point of sales, so you're going to have to change that. Like day one, you have to change it. So then you got to retrain all these people and then you're going to have all these people grumpy because their system was so much better. And then you're going to tell them, well, we're not going to like, do transmissions, we're not going to do this. We're not going to do this anymore. And then people are going to quit because people don't like change and they don't like, the guy who's the rebuilding transmission specialist or whatever isn't going to be out of a job. And so then, so now you've got turnover of senior people. Like, you're not doing all these services that you used to do that customers might be coming in for and you're going to be remodeling the place. You're going to be telling them, like, you're going to follow this checklist now. And they never had that before. You're going to be open Saturdays and they weren't before. And so, like, people are just, they're going to quit and then you have to restaff the stores and all that just leads to, you know, most likely lower, lower sales and just headaches that you Know, slow down the process. But with the franchise, kind of plug and play, generally, it's pretty smooth. You know, we have. There's obviously hiccups, but that's why.

[24:58] Host: Well, for my guests, one of the big points of conversation is that day one speech. So the new owner comes in and, you know, there's kind of a speech between, you know, in an official handoff and introduction by the old owner to the new owner. And it's also fraught. It's always fraught with a lot of anxiety on, on both parties. Part the new, the buyer, my guest, and all the employees. I suspect that, like, maybe those day one speeches don't even happen in your case. Or if they do, it's so smooth. It's like, because, because ultimately, like, like you said, I mean, not much is changing. And they may see their employer as much as being Midas, as the franchise operator or no. So talk to me, talk to me about that.

Guest: Yeah, so it var. Like, so, yes, I do that speech. I've done that speech, you know, 20 times.

Host: Okay.

Guest: You know, usually. Usually personally, but then, yeah, so, you know, it's a handoff saying, the old earners normally saying, hey, guys, I'm retiring. You know, meet Brian and Chris. Like, they're your new owners. They're gonna take care of you. And then, you know, we give a little background on our history. Hey, we've been in. Our family's been in the mice business for 45 years. We have X amount of locations. You know, we usually tell them, listen, I know you're going to be scared of X, Y and Z, but like, let us assure you, we've done this X amount of times, it's going to work out. Everybody's got a job. We always backdate tenure. So if they've been with that guy for eight years or four years or two years or whatever, that's backdated with us. So, like, you know, for PTO and health insurance and all this stuff, in a lot of cases our benefits and pay plans are better than whatever the outgoing guy is. Like, they might go up to two weeks and instantly, you know, a guy might have three weeks vacation with us or we have a 401k or like, we, in a lot of cases we have a better health insurance plan or, you know, our comp plans guys are making a lot more money potentially, if they can. If they can increase the performance. And so, you know, a lot of times we'll speak a little to that. But honestly, most of the guys probably don't even hear it. And then so we usually by day two and three, like our district managers and COO and everybody are going around sitting down with everybody one on one when they have more time trying to get to know them. And we've never really had anybody, well maybe one to one, one or two people quit kind of on day one or two. But most of the time people are willing to give us a shot. And you know, they. The good thing once again part of like that network is like a lot of people kind of know our names because we're pretty local. So like especially this guy. Some guys have traveled too. So like we've bought in stores. We've absorbed employees who worked for us like in the past, but they'll kind of like recognize the name but they'll know we've been around and you know, we have a good reputation so that, that's helpful. And by the bigger locations, like we bought seven stores, you know, in a single, single shot. And we went over two days to visit everybody. But by like, you know, by day two, everybody had heard. So it wasn't like it was this big aha moment. It's just a matter of like, you know, you guys know they're sold and here are your new owners.

[27:48] Host: And so Brian, why a couple things when you described your how you like approach an owner to sell and in many cases like they weren't talking to anybody else. A few questions. First, I know that seller financing is a big part of your acquisition strategy. So please talk about that because that doesn't, I mean heavily seller finance deals as I understand it. But so first that. Second, why given how kind of fertile it seemed like this kind of the Midas, the market was in, in Philly for a Midas roll up and that it was a mature franchise. So there, you know, it's been around for decades. Why hadn't somebody else done this last year or 20 years ago? So first on the seller financing, what does some of your acquisition deals look like?

Guest: Almost every deal we've done has either been we bought in cash if it's like a one store deal for, you know, under 200k or we, we sell or finance it in which the seller will finance. I mean 70%, 80%, 90%. My biggest deal was 97.5% they seller financed. The last time I went to a bank for an acquisition loan was in 2016 for the first two because I didn't know about seller financing back then. And so you know, kind of generally how it, how it works or how I approach it. And I'll go how I approach it, then how it kind of, kind of works is, you know, we go to the seller and say, listen, like, this is the first of all, this is how we bought X amount of locations before. This is the best deal for us and it's the best deal for you. And so you always premise it by like, hey, we're experienced. We've done this a lot, right? Is that for the seller, they get a. There's more flexibility what the price is. Because if there's no bank has to approve, there's not this big underwriting thing. It's kind of like we're willing to pay a premium if we feel that we're getting a good deal on the terms. And so the price has some flexibility. Second, all they get cash flow. Like as a business owner, you're used to X amount of thousand dollars per month cash flow, right? And so they get to kind of continue that. So in a lot of cases, I'm their retirement plan. Like, we're gonna pay them $10,000 a month for the next 10 years or whatever it is. Like I'm this kind of. I create this annuity that they get on a business that they understand, right? That they understand automotive versus they take this chunk of money and they stick into the stock market or with a broker or whoever and they, they really don't understand like what's going to happen to it. And it's really unpredictable versus mine is like pretty stable. They're going to get to defer their taxes. So instead of paying capital gains on this whole lump sum, which most of these guys, it's going to be almost the entire balance. Like, they're not going to have too much like basis points, but instead when they sell it on seller finance, like it's an installment loan. So they pay the same amount, just it's spread out over X amount of years. They're also going to earn interest from it. So rather than me paying a bank, they, they're gonna, they're gonna get the money and you know, finally, like back to that, like, track record is like, we have a track record of doing this thing. And so they inherently trust me and they, you know, I'm like, I'm like a pretty good bet and so hard for an outsider to do. But once again, once you're in a system, it's, it's a lot easier to build that reputation. And so that's kind of like why they would want to do it. Plus, it's just quick, it's easy. Like, they don't have to, like, I don't ask for tax returns. I asked for a P and L, like, one P and L. And that's all I really need. And so it's just like, it's quick, it's easy, it's reliable, it's cash flow, there's tax benefits. Right. All those reasons. And then, so I'll. When I talk to somebody, I just kind of lay out those. Those things. And almost every single time, people are like, okay, yeah, it sounds good. Like, let's see what the numbers look like. And so.

[31:30] Host: And why hasn't somebody else come along and done this before you?

Guest: There's other guys doing it throughout the country, like, friends. Friends of mine, you know. But, like, automotive is pretty. You know, it's a local business. Like, most of most owners, like, own stores local, relatively local to them. And so Philly, like, you know, there's kind of this change into the guard. Where it was, you know, back then, it was. It was a lot of older owners. It was really fragmented ownership. Like, the biggest. The biggest player, I think, was us, and we had six at the time. And then there's. There's another guy who's got about 17 or so in New Jersey, Philly, who's kind of like my competitor for buying these things. And he at the time had, like, he probably had six or seven. He had probably about the same. And he's been on the same path as me. He's been. He's been buying applications as well. And so a lot of it's just, you know, it's kind of the timing of it, to be honest. And same same for my buddies. And I got guys in Columbia and South Carolina. I've got guys in Tennessee. I've got buddies in Texas, like, California, all. All running a similar playbook where they're. They're younger and they're buying out the guys that want to retire, and they're good operators. And that's a big part of it, too, which we can touch on a little bit later. But, like, a lot of times, these. These locations I'm buying, none of them are losing money. Like, they're not doing well. And so, like, a lot of it is. It would be hard to get financing on some of these deals. It would be impossible to get financing on some of these deals because of the lack of profitability. And so, like, part of the benefit is as you get bigger, like, we have the ability to kind of take over a location that's losing 10 grand a month or whatever it is, and, like, invest the money. And then we sustain the losses for X number of months till we get this thing up and going. And then, you know, it's. It's. Then it starts cash flowing like we talk about a little bit later, because I don't want to get too off the seller financing, but in a lot of cases, that's like, that's a very real thing. And so that could be why other people haven't done it, because they haven't trusted themselves as an operator to turn it around.

[33:31] Host: Yeah. And are these. Some of these owners who just have a one or a small amount of locations, are they owner operators? Are they people who have W2s? And this was like a side thing for them or.

Guest: I had one side one. The one that, like, was losing the most amount of money. We're still, like, still struggling a little bit. Yeah, he had another job. That was his primary source of income, I believe. And like, he had three stores. And, you know, cumulatively, they might have been making like 80 grand a year, but like, you know, that number is up and down. And then you have like, you know, a couple pieces of equipment you got to buy or whatever it is, and that could. That cash flow can quickly go to zero between three. Between three locations. And so he had. He was selling because he had another job opportunity, quote unquote, and wanted, you know, kind of wanted this off his plate. But besides that, no, every other one has been. They had been. I mean, we say owner operators, but it was like they were like they had no other job. They were primarily, you know, they weren't like. Well, some of the guys were like in the stores every day, but other ones were, you know, had general managers in place.

Host: And for a location that's not losing money, that's actually a healthy Midas location. What. What are the terms look like, what are like. Or the multiple roughly? Is it. Yeah, typical. 3ish.

Guest: Yeah, 3ish. You know, I think we've paid. We've paid 3 and a half. Like, you know, you buy in more, you know, you're going to pay more location wise. Like, you know, we did it. We did a deal where it was five stores. They were probably making 600k. Let me just do some rough math here. And we paid all in about 2 million. We're paying for that one, but we paid. So that was the price. So go one of these deals, five stores making 600K. $2 million was like the purchase price. We put $50,000 down as the. So that's the two and a half percent deal. And we're paying that guy. I want to say it's like 10 to 12k a month for the next, I don't know, 13 years.

Host: Wow.

Guest: Wow. That's the. And the 2 million price was like inclusive of interest, so principal and interest. So in total we're going to pay this guy $2 million over the course of whatever it was. 13 years.

Host: Yeah. Well I heard your points there Brian and that would, that there was a pretty compelling pitch for seller financing. But still if I'm that guy with a business doing 600,000, I'm just going to, I'm going to shop that around a little bit. And yes, I might be used to getting you know, monthly income and so, so maybe I'm kind of married to that format for, for how I see my money come in. But like kind of most people just really just want the lump sum. I mean you know, talk to other business owners and non franchise land or the one Brian Beers aren't buying out and they're like y. Yeah, no thank you. I mean you have to push them for even 10 or 15% seller financing, let alone 70% financing for over 13 years. So I just want to push back on that a little bit. I think most people just want, just you know, want to the lump sum and not to have to think about it anymore. And then they'll give that lump sum to their financial advisor if they really want some sort of annuity.

[36:29] Guest: Yeah, that's why, that's why franchising is better. I don't know what to tell you.

Host: I'm working.

Guest: I'm working. I'm talking to a guy now in another, another, another group of stores. It's like five locations. There's real estate involved. He only has like he has one mortgage he's making. He's doing very well. Better than, better than my store like on a per average basis. And I pitched him on a seller finance deal that it would be, you know, versus could be like a seven million dollar thing. I pitched him on a deal of giving him like I don't know, 200k down and I don't know, 200, 300k a year, whatever. It was like 500 all in including the real estate and stuff. And he was open to it. Like so, so like I don't, there's something about it, I don't, I don't know that the guys, you know and like part of it is like they trust me, they like me. Right. Like once you're established person like you know, I'm more reliable than the stock Market in a lot of cases, like I think it is, but for an outsider, like if I was selling my business to an outsider, like I have no idea how they're going to perform. Like I want my money. But like when you're in the system and they're, you know, these are like friends of mine too. Like. Yeah, not some, these aren't some random people. Like, you know, I've known both these guys that like all these guys. I mean there's two, there are two biggest stores with like five stores and seven stores. But we've done threes and twos and ones along the way. And like every single one of them, they've seen me for years at these local meetings. Like we, some of our stores share like geographical regions. So like our employees would sometimes go between them. We'd help each other on, you know, marketing or help each other on operational issues or different questions. Like, you know, that's like, there's this whole community aspect that when you join a franchise you become part of this community and that like generally like they become friends of yours. I mean I, some of my like best friends are more like, you know, closer to my age obviously and not, not retired. But like, you know, there's this whole aspect so that you're kind of like selling it to your friend in a lot of cases or someone you really trust versus an outsider, some totally random person. Like, I don't know, you. Like, yeah, I want my money for sure. And like, and in the, in the independent business world, like every single person is an outsider, every single business, there's no, there's no sense of community. There's no built in trust. And so I think that's like, that's why this is like totally mind boggling to the people outside of it. Because like it just doesn't, it's this whole aspect that just doesn't exist.

Host: Yeah, no, it's really interesting. It is really different and appealing the more I learn about it, I have to say. Okay, well you talked about, you know, in answer to my question, like why hasn't somebody done this before? And it sounds like whatever timing. And now there's this changing of the guard in your market and in other markets you named around the country where you know that other of your colleagues and friends are active. So let's talk more abstractly, not just about Midas, but in our pre call you and I had talked about like just kind of any maybe fragmented franchise in your local market. Say I'm in Dallas or I'm in Arlington, Virginia. The D.C. area. Like, how could I apply, you know, Brian Beer's thinking, to the opportunities here. If I'm starting from scratch, I'm not looking at Midas necessarily.

[39:30] Guest: Yeah. So I guess it all depends on a, what your goal is. If your goal, like there's, there's, there's two ways, right? The, the first way is like, I'm going to go after the legacy brand that has, you know, do this roll up where you're buying existing locations as the primary source. There's this other avenue of growth which is through like the development arm, which is you're going to develop new locations. And I can kind of speak to kind of both. But if you're going after this, the roll up strategy, generally, yes, it's going to be a legacy brand. Something that has been around for at least 20 years. Something has a lot of units, right. Is a big part of it. So Midas is a thousand units or whatever. Subway, there's like, you know, 45,000 or whatever it is. There's a ton of them. And then B, it's, it's got to have fragmented ownership. So it's got to be different owners. You know, if there's 20 locations in D.C. like I would hope to see 15 different owners, right? If one guy owned all 20, like, if I owned all 20 of them, the likelihood of anybody else coming in and buying one or two from me, like, I'm not going to sell one or two. Like, why would I do that? Right? Yeah, they, they can have them all or they can have none, right? And so those are kind of like two of the big ones. I would look for a lot of units. So for example, Midas in Philadelphia, greater Philadelphia region, there's like 60 locations, right? So check that box. And in 2016, there was highly fragmented ownership. There was probably, you know, 30 different owners, right? And then now, because of, now, if anybody looked at it like there's only probably six of us that own almost 60 of them. You know what I mean? Over the years it has consolidated. So what worked in Philadelphia years ago is now not really good strategy for Midas because so those would be kind of my, my two factors. And like I said, I, I know other people. Like I have some guys in Subway that I know who, you know, a lot of people think Subway is like this dying brand, which they are losing locations. But the guys I talked to think it's actually a good thing because it's like pruning the bush where they're getting kind of rid of these. They were oversaturated in a lot of spots. So now that kind of helps make the existing source more profitable. And they're doing the same thing I'm doing. They're going, they're buying out these guys that want to retire. Just like they're not good operators. They're getting them for pennies on the dollar or they're getting them seller financed and they put in their, they put their thing together and they're turning around in cash flowing. And so like it's, it's a, I've talked to two different guys doing this in Subway and it's a very similar playbook that, that I run in.

Host: Brian, do you think this is, I mean I, I think this is happening now for the same reason that people are interested in acquisition entrepreneurship generally. One of the big reasons which is Silver Tsunami. So there's just that. Right. The, the boomers are retiring and so yeah, this or changing of the guard. I like how you put that. Okay, so that's happening not just in Midas, but across a lot of franchises. And that's probably the reason for all this churn and activity. And there's a window of opportunity here.

[42:19] Guest: Yep.

Host: So, so let's, let's really systematize this thinking. Okay. Another thing that we all know is that there's just thousands of franchise opportunities out there and many of them very long tail, low quality. You don't, you're probably not going to waste your time on them. So there's probably what, 100, 200, 300 established franchise brands. Like if I want to go out and systematically apply the Brian Beers like what you're advocating, Maybe look at 100 or 200 different brands in the D.C. area and then, and then kind of like build out a database of which ones seem the most fragmented in my local market. Something like that.

Guest: Something like that. Yeah. I think there's about. So I went through one time like they put together these different lists like Franchise 400 or Franchise 500 or whatever I put together was franchise times at a 400. Their top 400 by revenue. I think it's by franchise revenue. And of those 400, like I think 395 of them were over 25 years old. So like almost all of them were like relatively established brands. I had a good amount of revenue and a good amount of locations. And so yeah, I would say somewhere in that top four to 500 potential options at least when we will look at kind of the roll up strategy and then yeah, it's what's. Then you start doing some research like you're looking at hair salons or like, you can look at, you know, there's great clips, there's sports clips. Right. There's like, I don't know, I forget the others, but there's like a couple of those, right? So you can kind of look by your market to say how many locations of each, and there could be 5 of 1 and 20 of another, etc. And then you can start to get an idea from there.

Host: And who do I reach out to? Do I just reach out to the franchisor and say, hey, I want into your network or do I approach an individual franchisee? Where do I start my research?

Guest: Well, it's a great question. There's lots of different ways you can go. I think if there's a specific look, it really depends on what phase you're in. Like, if you're totally, totally new, like, you have no idea what.

Host: Let's pretend you have no idea.

Guest: Yeah, I mean, there's a couple. Yeah, you could, you could a start, you could read the fdd, right? You could find a way to download the FTD if you want to go that route and just start to do some own independent research to see, like, do I like this? But you also kind of have to know how to read an FDD to kind of get any value out of it. Honestly, the best thing, or like, what I would do is I would go to Biz by Sell and you can search for existing businesses that are for sale. And the thing, you can put keyword, and you can put franchise as the keyword. And so then it'll only show you franchise. Now, a lot of them will be blind. Like, they won't tell you what brand it is. So you have to sign the NDA and stuff. But I think that is probably the one of the better ways to at least start to spark ideas to see, like, because there's so much out there and you don't know what you don't know until you start kind of looking through the financials. You start learning about these different things, franchises, to get an idea. So I would, I would, I would do that, right? So it's Biz by Sell and you can see what's for sale. There's the old just drive by, right? You just know it's a Jersey Mike's and it's a franchise. And you go in, like you said, and try and talk, try and talk to the owner. I've done that before with other brands that we were considering, and the guy told me it was a terrible business. And he was trying to sell it and you know, all these reasons, it was actually pretty funny. There's that there is, you know, working with a, with a franchise broker or consultant of somebody who is, you know, does this kind of for a living and they help kind of play matchmaker. You know, a lot of times, you know, they're going to be more on the newer, newer brand side like the emerging brands which I think we'll probably touch on. But they'll have an eye, they'll be able to help in terms of, you know, maybe finding some resales that aren't necessarily listed on biz buy sell that are kind of kept more, more private and yeah, I think generally, yeah, if you find something you like then you can go to the franchisor directly as well.

[46:11] Host: Okay, great. And one of the things that I've heard some of my guests say is like they, when they started looking for a business, they didn't want to do a franchise. They encountered how difficult it was to find any business to buy. So then they opened their minds to buying a franchise. And then when they actually looked it around at some of the franchise resales that were on biz by sell or maybe that are broker bought them, it was often like a location doing you know, 100 or 200,000 SDE. And in our world of search, like that's too small. You, you know, the conventional wisdom is that bigger is better and the sweet spot being maybe you know, 700 to a million dollars in ste. So these franchise, these, these franchise established franchise businesses, individual units, 100 to 200 SDE way, way, way too small. However, now that I'm kind of hearing, you know, your playbook and kind of getting into the network with a roll up strategy might, you know, it could be, you know, there's the vision there to grow your SDE rapidly. This might be a way in. Am I right about that? Should searchers open their minds to buying a single location doing a paltry $100,000 in SDE?

Guest: Yes, as a, as a beginning point. And so here's kind of at least how I'd approach that is it is almost, it is nearly impossible to buy an existing multi unit group of franchises doing a million seven hundred and million dollars or whatever that whatever number is. You said. Yeah, because like if they're already doing that, they're going to want to sell to another franchisee like me. And if it's a good business like another franchisee is going to buy it, like why, why would they, why would they pass it up? And so you know, the only reasons they would is if like let's say it was in, I don't know, Louisiana or some kind of remote market that's small. There's maybe, Maybe they all 5 mitre shops or whatever it is. There's no other franchisees in the market and the big guys who do fly across the country for whatever reason don't want to go to Louisiana. Maybe it's, maybe there's nothing bad against those stores. They're just saying hey, we don't want to be in the south, we don't want this, we don't want that. So that would be kind of the only way you could find something was to be a group of stores that had no surrounding franchisees that wanted it and B, it was in a location that the national players don't want it. But a lot of cases, the national players, they're already going on airplane. If the thing can make money and then get it a decent price aren't going to pass it up. And so it's just, it's just going to be really hard to find that. Almost impossible or it's like way overpriced, right. That Maybe it's worth $3 million or whatever and they want 6 million.

[48:38] Host: Yeah, yeah.

Guest: And you know the multi guys want it but like they're saying listen, like it's just not worth it. And so they may say well let me shop around, we see if I get a deal. And then you know, because the bigger the numbers obviously the bigger that multiple variance becomes. So yeah, so it'd be hard to find. So then, then your playbook is all right, if I can get in this thing for the, make it 100 to 200k, what do I do next? That that's what like would spark the idea to say hey, I can buy one, it's making 100. How many other locations are there is a fragmented ownership, blah, blah, blah. Like we go down that path because to be honest, a lot of cases in mind, like my stores make about 100, maybe a little bit more right now. Like and so it's like that's not like an unusual number on a per unit basis. It's just a matter of you need, you know, you need a bunch of them to, to start to make the money that you know, gets really exciting. And so yeah, I would think you use that as a starting point to say can we grow it from here? And if you feel that, you know, maybe it's a, if it's a territory based thing and it's like that is you are landlocked. All the other surrounding guys like have no interest in selling. They appear to be really good performers. You kind of have this market that the land the other surrounding guys don't really want. You know, maybe not, not the best opportunity if you really want to grow it. On the other hand, you might find out hey, that's a beginning location. Through talking to the franchisor and maybe the other franchisees, you find out, well, a couple of these surrounding guys, you know, maybe only have a couple years left, they have no kids in the business, you know, they're potentially open to selling down the road. Like that would, that would then start to be interesting to me. So that's how I, so if I,

Host: if I consider that that hundred thousand$150,000 SDE in single unit location, single unit franchise, existing franchise business, I better be darn sure that I have done my research about other acquisition opportunities in in the neighboring area. Like I'm acquisition or I am as much as analyzing and assessing the larger market as I am that that loan location.

Guest: Yeah the loan location itself to be honest. I mean you're looking at it but like to understand the franchise model to say hey, are the, how well are these guys executing the model? Like it's also possible that like that location should be making 300k and these guys are just really bad executors. So like that would lead a. You can grow this thing pretty significantly and then you, you know, if you can get them to 300k each, you only need a couple more. Then it's not like you need to 30 of them.

[51:00] Host: Yeah.

Guest: To make some money or you might find out hey, they're a really good operator. Right. And the thing should be making 50 and then it's like, you know, are you going to be able to sustain that? And so those are the couple factors then like the other part of this is development or kind of new Greenfield territory, whatever you want to call it, that the problem, the downside of legacy brands and these roll ups is a lot of times they're also located in legacy locations in older neighborhoods that have been kind of potentially at least in Midas's case, you know, they were great in the 50s and the 60s and the 70s, but now they're kind of like these rougher areas or there's no new development, there's no new money and then all the new places that all the home the housing developments are and they're building up these town centers. There's no mighty shops and there's no, there's no automotive potential either. And so you know a lot of times to then to get into these new hot markets or these places you really want to be, you, you gotta kind of, you kind of have to build them up either way or territory based business, same thing. They're going to be like, you know, the new place like you know, in Florida it's like Ocala is like really big and growing. Right. Or the villages are really big with all the retirement communities which like there's no Mitre shops down there. And anyway, so that is like the problem when you were looking at this roll up is you're generally going to be in these older areas and that you're going to have to look at potentially new either way.

Host: Yeah, well, I, I, we're going to spend a minute on, on looking at new franchises and just doing a traditional kind of build a location and then build out multiple locations and, and explore that as an alternative. But one thing for a couple things you keep talking about being a good operator versus versus a not so good operator. Any quick bullet points on like what makes a good operator? I mean is it hard to be a good operator or is being a good operator just like doing the work? Is there more to it?

Guest: Yeah, I think a lot of it. You know, at that point it's running, it's running any business, like whether it's a franchise or running, you know, your own independent business. Being a good operator. The principles are really the same which is like, you know, focus on execution, like doing this, following the same process every day on every vehicle or every time that phone rings or whatever. It is like it's consistency of execution is what leads to being quote, a good operator. And I think, you know, the franchise you have kind of like what is, what is that? What does that consistency look like? What does that playbook like look like? Obviously they give it to you if you have your own business. You know though, it's like, it's the same principles which is like you're nice, you nice, you're nice on the phone. You say yes, like you want people who want the business. So you're not like making the monkeys like read a script. It's actually like they shouldn't have to really read the script because you want them to like want the business and have the energy to like get them in the door, not just say the words. And so I think that's a lot of, that's a lot of it. And then just you know, hiring great people, training them, having compensation plans that are Rewarding for performance, you know, you know, encouraging tenure through, you know, good benefits. All, all those things. Yeah, it's okay. It's, it's all, it's. There's nothing special there, to be honest.

Host: Okay. And then we've been talking about consumer franchises primarily and you know, brands which kind of brick and mortar locations. What are your thoughts about service franchises?

[54:09] Guest: Yeah, so tons of, tons of great options out there. I mean, I, we had, we had operated one for, for a couple years that was a mobile truck wash, so it was B2B. And you know, we got contracts with companies that owned large fleets of vehicles and someone had to kind of come on site and wash their tractor trailers, garbage trucks, delivery vans, that kind of thing. And so, you know, there's, I think there's tons of great options out there. I think, you know, there's some kind of, there's pros and cons, right? The pros are generally your overheads lower, right? Because you have some, you're operating out of some like flex warehouse space or potentially even your home. Your, you know, you can, as you grow, potentially you can buy more territory and still operate out of that single location. You're just like increasing your drive time. And so all that kind of helps on that side. You know, generally they're gonna be more labor based instead of like, you're not selling products, right? Like they're gonna be selling labor. And so, you know, it's, it's. You grow by, you know, having more people on your payroll and like this bigger company to manage, which there's pros and cons. I think some of the challenges, I think service businesses are a little harder to scale. I think, I think you can make a lot of money. You could probably make your million dollars. But like there's no, I don't think there's, there's not that many success stories of guys doing, you know, 30 million, 50 million, 100 million. Like there are in some. More like in the retail based franchises in part because it's so dependent on people. So I think you could build.

Host: Why is a Midas location any less based on people since it's all people doing the work?

Guest: Well, so half our businesses is like of our mix, half is parts, half is service. So like, you know, we, you know, obviously we can't sell parts without, without the service side of it, without the labor side of it. But like when we look at our like PNL, it's roughly 50, 50 parts and service. And so we have margin on that and we've margin on Labor.

Host: Yeah. Yeah. Okay. I didn't realize that parts was such a, such a significant part of the business. Let's consider new franchise opportunities. So the, you know, we've been spending our time talking about roll ups, talking about mature franchise brands. How do I consider that opportunity versus, you know, helping to build out new locations of a brand new franchise?

Guest: I guess it's all about is there like, is there a secret sauce? Like is there something that these guys are doing that they have solved new problem, they have a new product, they have a new service that is going to kind of open up a new market? Like I think those are some of the big reasons at least why I would look at like potentially a new, a new one. I mean, for example, I'm personally looking at a fitness concept partnering with some guys and opening up this fitness concept that uses ems, so electronic muscle stimulation. So you wear these body suits basically and you do a one on one workout. You can burn 700 calories in a 20 minute workout is the pitch. And so for people who are, you know, they don't want to go to the gym, they might have a prior injury, they can't lift weights, they just like don't want to like spend an hour in the gym, but they want to, you know, they like 20 minutes and they like burning calories. Right. So obviously it targets kind of up upper, you know, middle to upper income and people who pay country club sports and etc. But it's like totally brand new. It's potentially like, you know, the Orange Theory of whatever personal training you could say. And Orange theory is like this wildly successful brand. And so these guys kind of have this new, this new like business model that no one is doing. They're gonna be the first ones in the country really to pioneer this thing. And so, so that's something like I'm excited about and potentially said we're, we're like looking pretty, pretty seriously into this thing and kind of for all those reasons. Right. It's a new concept, but that, that solves a new problem and you know, provides a huge benefit to people that I think, you know, would do really well. So those are it.

[57:53] Host: Okay. And what about one that's maybe that's like kind of you're really taking a new concept to market and helping with the franchise do that. What about one that's maybe 10 years old, so a younger franchise where there's still greenfield, but it has product market fit. Pretty demonstrable product market fit is there because yours obviously I'm hearing a lot of Risk in yours. This is a new concept. The market may not, you know, respond to it. There's some risk.

Guest: Yep.

Host: Yeah. So, so maybe what about kind of the middle, middle of the road there? A 10 year old franchise, you know,

Guest: they have a problem, they solve. Like I, there's a company called Zoom Drain that I, that I like. They, they do drain cleaning, inspections, repairs and you know, they're in like 50 cities or something, maybe a little bit more. So like they're not, they're not small, but they're not across the country yet. And you know, there's a lot of things that I liked about, I like about them. A, I'm like, I'm like a customer there, so they do a really good job. That's, that's part of it. B is like, you know, it's one of these lower kind of costs, relatively lower cost. I mean 2, 250 grand or so to kind of get into it. It's kind of this niche service that's like relatively simple. Like you're, you're inspecting and cleaning drains. It's like the primary source in most, in many states you don't need to be a licensed plumber. So like it's not like you need this huge licensing thing. You need somebody who's like, knows how to clean drains but not, you know, this licensing requirement. You know, the overhead's generally low and like it's a totally recession proof business. Right. Like the drain gets clogged, it doesn't matter. Like it is getting unclogged one way or another. And then you got Roto Rooter, you got some competitors. Right. But like a lot of those guys are more now shifting focus to full service plumbing and some other projects where these guys are really in and down and in focused on like the specific thing. And so there's another one I like that I think is relatively new and it has some of the qualities I think people like.

Host: Okay, that's great. A couple more questions for you Brian, before we close it out. So circling back now to just the, the roll up of a legacy franchise brand. So what does it look? Oh, let's like in your case or somebody who's successfully rolled up some locations, what does the exit look like? So you know, yeah, like you've got so many locations, you're probably one of the biggest franchisees now in the country. For Midas, I'm guessing there aren't that many people with number four, you're there not that many people within the franchise franchise, the Midas franchise family who could Buy you. I mean, maybe one of the top three or somebody in the top ten could buy you out, but that's a small handful of people. Like, that's a, that's a lot of risk there. And they're scattered all over the country. Who knows if they want to buy into Philly. So, and then you always hear about, you hear about private equity being big buyers of franchise, as with everything, but of like multiple bundles of franchise locations. What does. Should somebody pursue the strategy who's looking to sell in seven to 10 years or is the real play here to hold on to it for a long time?

[1:00:53] Guest: It really depends on what. Like a. You got to start with that end in mind. Right. I think if someone wants to get in and get out in seven years, you know, they're probably going to be selling to another existing franchisee. Like, I don't know. I think that timeline is probably relatively short to get it to a number that would attract private equity. You know, from my understanding, you know, you need at least 5 million, right. In EBITDA to be, be attractive. Yeah. And then at that point, like, you know, obviously if you can get to 10, you got a lot, a lot, a lot of guys interested. And so, you know, it really kind of depends on how big do you want to big, I guess, get it and then how quickly do you think you can get it there. But yeah, so, so if you're going to stay relatively small, by small, I mean under, you know, under private equity basis, you're going to sell to another existing franchisee, either somebody kind of right below you or right above you in the rankings. So for me, there's another group that has 100 or so locations and they do have some locations in Philadelphia in the Northeast. And like, if I wanted to sell at like four or whatever, four and a half, like, I'm not going to get a huge number from them. And I know that like, they would be the easiest, quickest way. Right. And they are like kind of private equity backed in a family office backed. But like, you know, the best exit for me potentially would be private equity, which. So, but we're kind of in this no man's land. We're not really big enough. We don't have enough income to kind of like get a bunch of them attractive. Right. Because we're under five. And so then, yeah, our path now is like, let's get this thing. So it's making at least five. And then, yeah, there are a number that would be interested. I've spoken to a few of them. Just to kind of start to understand, you know, the kind of built to sell mentality of what does our business need to look like in X amount of years to make sense? Um, and so, like, that's how we're approaching it. How long until I sell? I mean, it could be 10 years. I don't. I don't really know. But like, part of the whole thing is, I don't know, I like the built to sell. What's the end in mind? Like what? Like, how can I make this business as attractive as I can on the day that we're ready, that we're good to go? And so for us, I believe that will be the exit, I think. I mean, the guys I talked to, there's a number of private equity companies that are, you know, in. In. I mean, for me personally, in automotive, like, they've done other automotive deals and franchises. They've done other franchise deals. Not Midas specifically, maybe not Service, but they're. They've done both automotive and they've done both franchising. So they, they get the concept. I think that's key is finding guys who are.

[1:03:20] Host: Who.

Guest: Who've done it before and they really understand it. Not like it's their first franchise deal. I think that would be. I don't think you'd get the value that you would out of the guy who's. You knows what he's looking at.

Host: So it does sound like you expect to exit. Not at the end of your career, but probably sometime.

Guest: Yeah, one day sooner than that. I mean, you never know. The other option is like, you get it so that the business, you have a great team in place and you're able to make enough money that you can live the life you want to live. And you really then have no reason to sell it because then you sell it. It's like, what else would I do? You still need income coming in, right? So then you get to go and like, start something from the ground up all over again. But on the other hand, if I build enough people around me and have a really good team, like, I. I could go off and build the fitness concept to do whatever I wanted either way. Right? So like, like, you'd only really want to sell if you get to the point that I think it's weighing on your time or your energy or you believe that it's gonna go down or like there's some sort of negative reason. Otherwise, if you can continue to build it like, you can. It can support your life to do whatever you want at, you know, whatever. Whatever Size and just really depends on what that looks like for the individual.

Host: And how many hours a week are you putting into the business? And your brother Chris as well?

Guest: I don't know, I don't count him. But I spend, I don't know, probably

Host: full time, so almost full time still.

Guest: It's hard. I mean, I don't count them. And like, you know, when you own the business, you're always thinking about it, right? I'm always coming up again. I'm like the visionary too. So like I'm the one coming up with the ideas of, oh, we should do this, we should do that. Like, you know, I never really stop and obviously I spend, I spend time on Twitter and you know, obviously promoting my, you know, this franchise side and the franchise education which, you know, I'm working on a whole thing around that. But, but even all the, like, even the things I talk about, there are lessons I learned in running the business and then I get ideas from there that go in the business. So it's hard to say. I mean it's, it's been integrated in my life for so long that I don't really know.

Host: Okay, but you know, you could hire an operator or an executive to take over your 30 hours a week and more.

Guest: I mean we have.

Host: You just choose not to. You're just. Because you just continue to enjoy being in the business.

Guest: Yeah, we hired a CEO back in August who's taken over a ton, ton off my plate managing our kind of our district managers. And he's amazing. And so that, that's been a, that's been a huge, huge benefit. So a lot of my time is, is more, you know, obviously working with him to kind of train him to kind of fill as many much my shoes as possible. And then it's, you know, it's the growth, it's the expansion. It's, you know, do we go into new markets? I mean, I'm looking at new locations, you know, working the relationships with franchisees. You know, we want to buy it sometimes it's, it's not necessarily like you're just going in the office and doing the work. It's more the kind of the surrounding aspects of it. Sure.

[1:06:11] Host: On the business versus in the business. Sounds like a good build to sell approaches. So you touched on this new project of yours, kind of franchise education. It's I assume why I started to see you all over the place about six months ago or so. One of the things we talked about on our pre call is franchise consultants in this world of, you know, what they are and that they don't have the best reputation. And you fully recognize that and thought you could bring something else. Precisely because franchise consultants kind of suffer from, from, you know, tainted reputation. Not saying you're going to be a franchise consultant, but you are going to sounds like, help people find that good franchise for them, that good franchise opportunity for them. I'm putting words in your mouth. So tell, tell us, tell us what you're doing and why and what problem you're solving that existing franchise consultants aren't already.

Guest: Yeah. So I am working just to help educate people on everything we talked about today, which is that like, you know, I've franchising has provided a great life for my family since 1976. Right. It will continue to provide a great life for our family, you know, well, you know, for decades to come as I teach, you know, my kid, my daughters, you know, about business and growth. And so I think it's a really good opportunity. I think a lot of people have these preconceived notions for whatever reason, about the negativity. And I think that, I think, you know, like I said, it's provided great life for me. And Obviously you have 200 plus employees, like, I'm able to provide a great life for our team. And I think there's some really good benefits. And so I think there's not enough people talking about it on Twitter and on podcasts and stuff. And you know, like you said, the Silver Tsunami's coming. There's $7 trillion of business changing hands. 10% of those are going to be franchises. So whatever $700 billion worth of franchises will be changing hands over the next couple years. And like, I think it's the best possible opportunity to get into one, whether that's a legacy roll up or whether it's you're doing a legacy brand and then you're doing new locations or whatever it is. Right. Tons of opportunity out there in the world. And so, so yeah, I've been on Twitter. I talk about a lot, you know, had a lot of people coming to me kind of with questions on kind of all this stuff. So a couple things a, I'm putting together, you know, the kind of the course to teach people, you know, as much as information I can pack into there, kind of this intro to franchising. But what it is, all the different fees, kind of like a realm of like, here's like what the world looks like. Because there's no like, perfect franchise, right? There's no franchise. I could tell you and say, hey, go Buy this, you're gonna make money. Because, you know, the perfect franchise is one that matches the person to their skill sets. Like the things that I'm good at in my market, like in Philadelphia, because you gotta be local and that, like, that has problems that you enjoy solving. It's like every business has problems. It's. Do you wanna, like, deal with those types of problems? And I think if you can find those three things, like, you can make. People are making money in every franchise. Like, there's obviously some ones that probably are just people are set up to fail or. I don't believe in the business models, like, but like, for the most part, you know, when you read through these fd, there's people in every single line of business who are doing really well. And so it's just a matter of finding something that, that matches that. So my goal is to help people, you know, discover what they want, what they don't want, and go from there. And so in terms of the franchise consultancy, I had a lot of people come to me. What are the different ways? One of them is you find a franchise consultant who is somebody who, you know, is part of this, like an affiliate network. They have all these different brands that are kind of in their portfolio. They can kind of take your. The things that you're looking for, you know, income goals, financial goals, different industries, etc. Locations. They come to you and they present a couple different options to say, hey, here are four or five different franchises that potentially meet what you're looking for. And then they kind of help some help someone guide them through the process of becoming a franchisee, which includes seven different calls and the FDD and franchise validation and Discovery Day. And there's all these. It's the same process pretty much for every franchise, but different steps. And so, you know, the problem or the, the reputation side of it is there's just. There's people out there who just don't have, like they were. They were some corporate employee or they were like doing something and then now they're a franchise consultant. Right? Like, they don't necessarily have the experience to really know, you know, what are the good things, what are the bad things. Like, there's a lot of guys out there actually who I know who are, after I said some of this stuff, who have I. Who I've since talked to, who are really good and they, they've been in the business for years. They know a ton of stuff that there's others that I think just it's kind of a job and they're trying it out, and, like, you know, for the franchisee, like, signing that franchise agreement's a big deal. Like, it's 10 to 20 years potentially kind of locked into this thing. And so, like, it's a really big deal. And so you really want to make sure that you find one that's really good. And obviously, like, the better you have, the better quality people that you have on the team, the more likely you're gonna, you know, make that move. And so I had all these people come to me then wanting recommendations of who I should talk to, and I figured I'd become a franchise consultant. So I am. I am now. I've been in since October or so. I joined one of these networks I thought was the best one. And so now, yeah, I'm helping. I help a handful of people a month. You know, I don't have, like, you know, all the time in the world, but the people I have helped, I mean, I think I've done a really good job and it's been fun, so.

[1:11:41] Host: Well, the. The question I gotta ask Brian is the one that, you know, people who sell education online for a living always get, which is, you know, you have disposable income, quite a bit of disposable income, all this experience. Why not roll all that income and experience into doing another franchise yourself rather than helping students, like, to operate another franchise. Yeah. Like, get into a. Yeah. Like, if I come to you and I say, brian, what. You know, help me figure out what franchise to do, and you can do the same analysis for yourself, you know, and then go out and, you know, do another 20 locations of some other franchise while you continue to have your Midas stuff.

[1:12:17] Guest: I don't know, part of me. So we've tried two other franchises as a franchisee, and, like, I. And in both of them, I was kind of like the lead person on them, you could say. Like, we had people running the day to day, but, like, you know, kind of employees. And I was kind of lead person, to be honest. Both those failed. And, like, I think a lot of it is because, like, I don't know, you start something up, but then you think it's going to be this big diversified thing like the Warren Buffett. I'm going to have this, like, a million different companies into this, like, portfolio. But, like, unless you. You, I mean, have really key people in place who I think can. Can run the ball without you, like, it comes down to you, right? So then I found my time was, like, really diversified and diluted between Midas and Between these other things and kind of the new one, you. The honeymoon phase, I would start it, I'd be all into it, and then I kind of, like, I'd lose some steam over it, and then it. And then it wouldn't do as well. And then, like, something would happen at Midas and I'd, like, all my attention would go. Like, we'd get a new acquisition or we'd do some, like, usually good things would happen and then, like, totally ignore the other business. And at the end of the day, both those businesses ended up losing money, significant amount of money and more just put more stress, like, on me. And so then, you know, kind of going forward, we decided the only way we'd get into another business like that, that, that we had to operate was if someone else, like, was the franchisee. And we're just kind of, you know, maybe we're partners in, like, this, the fitness thing. Like, we're going to be there kind of financially to invest, to provide our, you know, decades of knowledge. But, you know, we're going to have someone else who's got skin in the game, who really owns it, and we're there to help, like, add fuel to the fire, not to be the key person. And then the education side, I mean, I think it's fun, you know, like, you know, you have no. You have no cost to it, right? Like, and so I can kind of turn it on, turn it off as much as I want. And it's. But it's not like it's this thing where, you know, you've got all these expenses and this overhead. And plus, like, I made a lot of new friends. I mean, I've had people want to partner with me through that. Like, I have a couple guys we're talking to who are. Want to be that franchisee and want us on their team, so potentially getting equity in the business to kind of help them accelerate. So I think. I think for me specifically, there's, you know, it's not just about selling a course or making money there. It's really about, can I find guys who could be potential partners for us who we could, you know, back, you know, with some money. But, like, honestly, it's less about the money and more about, you know, the knowledge, which is, I think, you know, where we can add a ton of experience and, you know, like I said, put fuel in that fire. So there's a couple different avenues for us, but that's. That's a big part of it for me is these potential partnerships.

Host: That's great, Brian. Well, tell people how they can find you on online, please.

[1:15:02] Guest: Yeah, so Twitter, I'm the most active. It's ryanbeers with an I. And I have a podcast as well, Business with Beers where I have two episodes a week. Mondays drop usually some sort of episode that's a, you know, kind of more general business like kind of whatever I'm interested in or you know, I've had Mike McCall, it's on. I've had Steve Sims, I've got Cameron Harrell, by the time this thing launches, a number of famous authors and just guys who are growing a business, scaling a business, solving problems. And on Fridays I do a franchise specific episode which could be an interview with a franchisor successful franchisee or just me speaking on a topic for 10 or 15 minutes solo. And so those are the two best ways I'd say is on Twitter or Facebook, find me, find me, find my podcast.

Host: And that was Business with Beers.

Guest: Business with Beers, Yep.

Host: Great. Well Brian, this has been an education. Thank you very much for coming on. Really great to, to understand this playbook. It sounds like it's could be a really great opportunity in a lot of markets around the country and one that isn't going to be here in five years. So people should really take note. Thank you sir. And congratulations on quite a story yourself with the Midas roll up.

Guest: Great, thanks for having me.