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

And then from there, that's where you start to see incremental units, incremental dollars of sales translate into a really attractive financial proposition for the franchisor.

Yeah. Well, wow. If you guys at 200 units are, again, 4 to 5 million of EBITDA on 12 million of revenue. So that's what, 33 to 37 or 8% net margins already. Yeah. And so those margins are only going to improve from an already very high base. No wonder you pay double digit, double digit.

And we have, of course, some kind of role in that and some cut of that as the franchisor. But gee, why aren't we opening stores ourselves? Like that's that's all roads lead to that conclusion.

So we're very excited. Tyler and I are to be opening stores. We got enough fish to fry at the franchisor, I would say, for the next year or so, at least.

But. At some point in the not too distant future, we're excited to open some of our own stores as well.

Isn't that a distraction? Isn't it like you want the franchisor to have a few of their own stores so they know what it's like? Basically, they can really empathize with the franchisees.

But fundamentally, your value prop is different than being store operators.

I don't think so. And that can be true for some concepts. You know, it was true of RBI, I would say. That was certainly something that we would talk about in earnings calls.

And now, you know, RBI owns something like 2000 restaurants. So there are reasons why it can make sense for the franchisor to be also participating on the unit level or the franchisee side. I would say in our case, really the differentiation for our two concepts.

is operations. So it's operational efficiency. It's moving through hundreds of thousands of units of inventory every year. And that's descriptive of an average store.

So really, the battle is won and lost in operations. For sure, marketing and brand building, this is important, just as it is for any consumer-facing business. But really, our value proposition is all tied up in our operations.