Buying a $200m Franchisor (Not Units, the Whole System)

When today's guests set out to buy a business, they first systematically developed a thesis. Both with private equity backgrounds, brothers Tyler and Zach Gordon combed through lists of industries, looking for ones with great fundamentals, but not yet on private equity's radar. The process led them to a franchise system of thrift stores.

At first, Tyler and Zach thought they'd be franchisees, buying a platform of existing units and building from there. But the subject of today's interview is how our heroes ended up buying not units in the system, but the system itself. So this is a story, our first, of buying a franchisor, a system with about 200 thrift stores that collectively generated about 200 million in sales when Tyler and…

In Acquiring Minds interviews with entrepreneurs who've acquired franchises, we've talked about how to evaluate the franchise system. And of course, the franchisor is a key consideration. What is its value proposition?

What are you getting in exchange for those licensing fees? What is the franchisor's relationship to its franchisees? Well, today you'll learn to think about these questions from the perspective of the franchisor.

And this should help if you're interested in buying franchise resales. Or, after hearing Tyler and Zach's story, maybe the whole dang system. You're also going to learn a lot about the thrift industry.

It will probably surprise you, as it did the Gordon brothers. And here they are, Tyler Gordon and Zach Gordon, co-CEOs of Basecamp Franchising. If you haven't checked out Smith List for a while, there are some great opportunities listed there right now.

These are leadership positions within entrepreneurial small businesses, including from a small manufacturer of an iconic American product, a 45-person design and build firm, and an ABA center for children looking to expand to multiple sites. Head to smithlist.com to check out these new roles for entrepreneurial operators and GMs and CEOs.

And while you're there, sign up for the alerts so that you're notified as we post yet more opportunities from the SMB and ETA ecosystem. smithlist.com smithlist.com

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.

The team at Aspen HR recently published a short white paper targeted at searchers entitled A New CEO's Guide to Human Resources. It lays out the key items you should be thinking about as you transition into CEO and owner of the business you bought. The link to download it is in the show notes.

Aspen is a professional employer organization, or PEO, run by a searcher for searchers. Search fund veteran Mark Sinatra runs the company, which provides HR compliance, flawless payroll, Fortune 500 caliber benefits, and HR due diligence support for your acquisition, all for a fraction of the cost. Go to aspenhr.com or contact Mark directly at mark at aspenhr.com. Tyler Gordon, Zach Gordon,…

Thanks so much, Will. Appreciate your having us. We've been a big fan of the Acquiring Minds podcast for, honestly, as long as I can remember. Awesome to be here.