The Midas Touch: Scaling a $40M Franchise

An entrepreneur’s journey of learning to scale a business can be an exhilarating one filled with exciting highs. The journey is not without its challenges, however. 

Although the dream of building a world-changing business and achieving financial success can be inspiring, securing funding can be challenging. In many cases, entrepreneurs lack access to seed money or are unwilling to give up ownership of their companies. That’s where bootstrapping comes in.

Rather than relying on external funding to launch and grow a business, bootstrapping uses your own resources. For example, you may use your personal savings, the revenue generated by the business, and creative financial strategies to fund your venture. A classic adage perfectly captures the essence of self-funding a startup – “pulling yourself up by your bootstraps”.

As a matter of fact, a vast majority of startups (75% to 85%) use bootstrapping as a means of funding.

One such story is that of Brian Beers, a successful entrepreneur and investor who transformed his family’s struggling business into a $40 million franchise empire. In the following post, Brian shares his experience bootstrapping a franchise using seller financing, providing insights and strategies for aspiring entrepreneurs.

The Midas Touch: A Family Affair

Brian has long displayed a natural knack for business. As an entrepreneur inspired by Warren Buffett, he explored a variety of ventures, including software development and finance. His destiny, however, lay closer to home. After struggling for years, Brian made a life-altering decision in 2010 when he decided to revitalize his family’s Midas automotive repair shops.

As a result of the 2008 economic downturn, the automotive industry was left teetering on the brink. However, when his father expressed interest in retiring, Brian saw the opportunity as an opportunity, and not as a burden. It did not matter that he had no experience in automotive repair or franchising, he was determined to succeed.

Learning the Ropes and How to Scale a Business Up

In order to become an expert in the automotive world, Brian spent countless hours learning from other franchisees. In the years following, the business started to recover, but significant growth was difficult to achieve. Despite the obstacles, Brian saved diligently, laying the foundation for his ambitious expansion plans.

It all changed in 2016 when his brother and he acquired two additional Midas locations in Philadelphia. As a result, a rapid growth trajectory was launched fueled by strategic acquisitions. 

Seller Financing: The Secret Sauce

A key component of Brian’s expansion strategy was seller financing. In contrast to traditional bank loans, seller financing offers flexibility and favorable terms. For instance, one deal involved financing the remainder of the sale over ten years after a $50,000 down payment was made.  As a result, Brian was able to acquire multiple locations every year, including seven in 2021 alone.

In other others, Brian focused on three key numbers when negotiating seller-financed deals: the down payment, monthly payments, and loan term. By emphasizing cash flow, he was able to create deals that were appealing to sellers and manageable for his business. As a result of this approach, Brian was able to scale his business rapidly while maintaining control over it.

Moreover, Brian’s business grew exponentially due to the reinvestment of profits and the use of creative financing methods. As of today, he owns 33 Midas locations in Philadelphia and New Jersey, employing over 200 people and generating more than $40 million in revenue. 

To achieve this growth, Brian bootstrapped and used strategic seller financing to minimize risk and maximize returns.

Overcoming Challenges and Building a Team To Scale Business

At the same time, it is not easy to run a multi-location franchise. As Brian emphasizes, it is important to have a strong leadership team and streamlined operations. Through hiring top talent and implementing efficient systems, he was able to successfully manage multiple locations.

Another key aspect of Brian’s success is his ability to turn around struggling locations. Through strategic improvements, he increased the value of his portfolio by identifying underperforming stores.

Focus, Commitment, and Franchising

Brian firmly believes in the adage, “Chase two rabbits, catch none.” In other words, rather than spreading resources too thin, he advises focusing on one venture at a time. One way to do this is to partner with someone who complements your skills

“I’m happy to make 6% less money but have double or triple or quadruple the amount of actual profit dollars because I’m only focused on the few things that matter, that I’m really good at,” he explains.

Brian also uses virtual assistants for almost all back-office tasks, including accounting, HR, and IT. Taking this approach allows him to focus more on growth instead of administrative duties. With the help of skilled VAs from the Philippines, significant cost savings have been achieved without compromising quality.

Moreover, he prefers franchising to independent business ownership. By providing a proven framework, franchises reduce the burden of building a brand from scratch. Using the franchise model, Brian can focus on operations, financial management, and growth.

Encouraging Entrepreneurship

Brian urges those who are unfulfilled in their current job to take the leap into business ownership. In the worst-case scenario, you could be forced to return to a similar job. However, the upsides could include financial success, personal fulfillment, and a change of lifestyle. 

However, the key is to have a strong ‘why’ that motivates you to push past your fears

Conclusion

From taking over a struggling family business to building a $40 million franchise empire, Brian’s journey demonstrates the power of entrepreneurship, strategic financing, and relentless determination. Those seeking to start or grow a business will find inspiration in his story, demonstrating that success can be achieved with the right approach. 

Whether you’re an aspiring entrepreneur or a seasoned business owner, Brian’s innovative use of seller financing offers valuable lessons for anyone seeking to scale their business.

Key Takeaways

• Think big, start small. Take small steps and gradually expand your business.
• Overcome adversity. A struggling family business became a thriving franchise under Brian’s leadership.
• Strategic financial planning. Learn about various financing options, including seller financing and franchising.
• Build your A-Team. Identify and surround yourself with people who are highly skilled and dedicated.
• Leverage technology. In addition to streamlining operations, virtual assistants, for example, can reduce costs.
• Continual learning. Make sure you keep up with industry trends and are able to adapt to them.
• Getting over your fear. Don’t be afraid to take calculated risks and pursue your entrepreneurial dreams.

Featured Image Credit: Lukas, Pexels; Thank You!