Patrick:— “Hey, Patrick Findaro here. Co-founder at Vetted Biz. Today I’m excited to be on the line with Curt Maier, business broker and franchise broker at IBA. He’s the only licensed franchise broker and business broker in the state of Washington.
Probably, I’ll add in also the only ex-nuclear submarine captain or naval officer as well. You had those three categories sorted out without a doubt. He’s a graduate of Notre Dame. He’s done a lot of different things in his career that Curt will go into.
But today’s discussion is mostly focused on the benefits of going with a new franchise versus going with an existing business or a franchise resale. So, Curt, thanks for joining today. We’d love to hear a little bit about how you got into the franchising space.”
Curt:— “Sure, Patrick. It’s a pleasure being here. I’ve been blessed in that I’ve had three distinct careers between my naval career as a U.S. Naval nuclear submarine officer, 20 years in a Fortune 300 corporation, Air Products & Chemicals selling industrial gases.
And then the last 18 years as an entrepreneur where I’ve owned and sold four businesses, two of which were franchises, which I’ll describe in a little bit more detail. The way I made my way into franchising was typical of most corporate refugees.
At the 20-year point, I had a very fulfilling career. I was doing some merger and acquisition work for the company I was with. So, I was a strategic buyer purchasing businesses and rolling them up in a particular industry. And realized that between my wife and me, we needed some flexibility in our lives.
Initially, I thought my wife would stay at home for a while, but she encouraged me to do something entrepreneurial. When I thought about that, most of my friends suggested that if I did consider small business ownership, I should look to purchase an existing business.
I was performing the work of a business brokerage for myself.
Now, I was living in Allentown, Pennsylvania at the time, the lovely Lehigh Valley, not quite the robust area that I live in now in Seattle, but there are always businesses for sale in every geography and at any time. And back then in 2003, 2004, I looked at several businesses ranging from manufacturing to services and everything in between.
And I had lunch with a friend who asked me how it was going, and I showed some concerns about each of the opportunities I was looking at and he interrupted me and said, Geez, what are you looking for? Perfection?» I said, Well. I want this to be successful. This is my first rodeo.» He convinced me that I needed to open my lens a bit and go beyond existing businesses and consider franchises.
Quite frankly, when he mentioned franchising, I was in a different mindset. I thought that franchises were only for those that couldn’t do it themselves.”
C:— “Exactly. I thought Harry is steering me into buying a Subway or something. My God, that was furthest from my mind. I was thinking more along the lines of a B2B kind of arrangement. At any rate, he encouraged me. He said, Look, you’re looking at businesses, you ought to look at franchise concepts.» At the time, my search was done primarily via the internet on my own.
And so I did enlarge my search to include franchises. I had plenty of time. So, I looked at a number of them from staffing to janitorial to child education to health care. I looked at a number of opportunities all the way up through making several discovery day visits as well. Ultimately, I decided on the senior healthcare space.”
C:— “And that was based a bit on the demographics of the Lehigh Valley where I was living and the fact that I knew there was a market for those folks that had cognitive or physical impairments.”
C:— “Yes. Absolutely. And I wanted a business model where I would not have to open the operation, open the store, close the store, that type of routine, but I could add value by doing what I enjoy. And that’s more on the sales and marketing end, and leaving the operations to the staff that I would hire. So, the long and short of it is that I made the decision to go with SarahCare.
It was an adult daycare franchise and I had to make an investment in a bricks and mortar facility about 6,000 square feet. And I hired and trained my initial staff, negotiated my lease, and away I went. And it was scary like it is for a lot of new franchisees.
Every other week, I was hitting my line of credit to make payroll and just wondering when that day was gonna come where I was gonna make the money and replace my corporate income that I’ve anticipated doing when I made the investment. And sure enough, eventually, reached breakeven and eventually replaced my corporate income—”
C:— “About three years.”
C:— “I replaced my corporate income and that enabled me to hire someone to run the day-to-day and enabled me to basically become a full absentee owner at that stage.”
C:— “Well, I’ll tell you, this is rather dramatic. So, I was fully absentee to the point where I moved to Seattle, Washington and I was 3,000 miles away from my business in Pennsylvania.”
C:— “No Zoom. I think when you have to have to make something fully absentee-owned is you need to have the right measures and metrics in place so that you can monitor the performance from afar, and have the confidence that your employees are not ripping you off, and that the quality is being maintained without you present, etc.
I would spend many hours on the phone with the executive director that I had in place to run it. And I would make occasional visits to my site during the year and such, but in effect, I was an absentee owner.
I only sold because I received an unsolicited offer from a fellow that I knew that was looking, interestingly enough, that was looking for another job in the industry because he had been laid off. And when I told him my story about how I left the corporation and became a franchise owner, and how the franchisor had trained me in the business model, and how it had been so successful and profitable, and how it had growth characteristics to it, he then became so interested that he asked to buy me out.”
C:— “An offer was raised. And six months later, we made a very smooth transition and I pocketed a fairly good amount of cash from that investment.”
C:— “So, you can imagine that after I transitioned, and it was a swift transition because I had staff in place and it was a franchise system. So, after collecting my check, I returned home to Seattle and the thought about the future came into my mind. I was so focused on closing the deal because no sense worrying about the future until you’re closed.”
C:— “Then I started thinking about what I wanted to do next. Now, since I had this successful small business ownership under my belt, I felt very comfortable now looking for either an existing business or even a new franchise because it had done well by me. But I what I came to the realization of was that what I really wanted to do in life was to help people like me.
So, I had just sold a business for the first time. I had to value the business, I had to package it, I had to help the buyer secure funding, I had to help the buyer transition the operating licenses from the Department of Aging, I had to help the buyer transfer the lease from a nasty REIT.”
C:— “Exactly. I was performing the work of a business brokerage for myself. So I thought, Well, that’s interesting.» And then I thought about when I left the corporation and as I described to you, I flailed around looking for an existing business, ended up finding a franchise. So, I realized there’s a market for someone to help people buy either a business or franchise and to sell either a business or franchise. And I had done them all.
So I thought, why not become a business broker? So that’s what I did. And because I was so comfortable as a franchisee in the senior healthcare space, I became a franchisee in the business brokerage world. So, I became a franchisee of Murphy Business Sales, one of your national brokerage outfits. In fact, you interviewed one of their premier brokers.”
C:— “Absolutely. So, what I liked about Murphy is that in addition to selling businesses, I had the opportunity to continue to be involved in franchising, which was good to me. And I’m a believer in it, especially for those like me who are executioners, who are looking for a business model to execute, especially for the first time.
So anyway, I owned that business for about five years and sold a number of businesses and a number of franchises. And I realized that when buyers came to me, they’re having both options available to them, either selling them an existing business that they could do due diligence on and be comfortable, it would be generating cash on day one. Or, buying a new franchise where they could decide where to locate it, what business model to employ, etc.
I could offer them both choices, and whatever was the best fit for them would be the way to go. And my clients love me in the sense that they weren’t concerned that I was gonna steer them in one direction or another.
I would only have a certain amount of inventory to show them. Correct? If I was only a business broker, I would only have the existing businesses that I had for sale available to them. But because I was both, I could offer them either one. And that really is the ultimate in working with the buyers to provide all the options.”
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