Last time we looked at scrap yards and how Sam Bacon is moving across the value chain to stay ahead of consolidation in his industry. 

This week, we are focused on Brian Beers and the world of auto repair franchises. 

Fast Facts:

• The US franchise industry has a market size of $188.87 billion

• Franchises employ over 8.5 million people and contribute an economic output of $827 billion with 10% of all businesses in the US being franchises 

• The largest franchise categories range from home repair, remodelling, carpet cleaning, household furnishing

• The largest franchise brands in the world are Mcdonald’s, Subway, KFC, 7-eleven

• Mcdonald's is the largest franchise with over 38,000 locations worldwide 

• The top 5 fastest growing franchises in 2024 are Stratus Building Solutions, Crumbl, Wealth Directors, PostalAnnex and Mr Handyman

Chart:

• This graph from Technavio shows that the market size for franchises across the US will continue to grow steadily year-on-year

Overview: 

• Brian’s franchise business Prenlyn Automotive Group has 33 Midas Auto Repair locations throughout Philadelphia, Allentown and New Jersey

• In 2023 his franchises had over 200+ employees and earned $42 million

The Story:

Brian’s family has been involved in the franchising world since 1976. His father started at age 22 with Brian’s grandfather. 

Franchising is in his blood. 

In 1976 they had six auto repair franchises in six different locations. It was a small operation

In 2010, during the financial crash, Brian's family, like many other business owners, suffered and knew they needed new blood.

Enter Brian.

Brian had just graduated from college. He felt he could take the business to the next level. 

So he decided to step in.

The first thing he did was travel around the world and meet other franchisees for tips and inspiration to see how he could apply it to his business. 

Every great entrepreneur knows that a simple cheat code is leveraging the knowledge of your peers. For 6 years Brian brick by brick reshaped and applied all the knowledge he had learned from other franchisees to the family’s franchise.

He revamped operations, built up sales and added additional franchises. 

He and his brother took out a bank loan, bought two existing locations in Philadelphia and ran them as one, with Brian serving as President. From there, they spent the following years compounding money. They saved enough to buy their next franchise, and the next, and the next. 

By the time COVID hit they had nineteen franchises. 

In 2021, they took a big step and bought up the whole of New Jersey’s market for Midas in one go and bought up the surrounding franchises around New Jersey. 

Fast forward to today: they just wrapped up the last fiscal year on $42 million, and they expect to hit $50 million in 2024. 

His advice for good franchising: find a good brand and a business model that matches your goals and skill sets. 

You can’t sell what you don’t know or like. And that starts on the ground, with the customers. 

Where’s Brian going next? 

He’s accomplished some great things with his franchise network of auto repair garages. 

Now, he’s developing a series of That 1 Painter franchises to both continue growth and diversify his holdings. 

His goal with the new franchise is to own the Philadelphia market. 

With his experience, I think he can do it. 

• Entry Bar: (5/5) Franchises often sell territories to one operator. This is ideal. You can essentially keep direct competition out. 

• Steady Cash Flow & Profits: (4/5) Get the brand right, get the business plan right, and get the market right. There are auto repairs everywhere because everyone needs them. So if you keep a consistent level of quality craftsmanship, your brand name will become synonymous with that same quality craftsmanship at other franchised stores. 

• Scaling Potential/Owner Dependency: (3/5) It requires a lot of time and investment to get a set of franchises to scale. Operators need 10-plus units to build a management team. You are also limited in whom you can exit to and this caps exit multiples.

• Differentiation: (5/5) Yes, there are auto repair shops everywhere. That’s why a consistent brand can help you stand out from the crowd. Consider this: if you want fried chicken, which fried chicken restaurant do you think of? This is what you are buying.

• Pain in Ass Level: (3/5) Owning a franchise doesn’t mean you sit on your butt all day and watch the money roll in. It’s your job to keep the franchise growing and sell it to the sellers. Once you scale, it can be self-managing but it takes a lot to get there. 

• Wrap-up: Franchising is a great way to get into business but it isn’t a get-rich-quick scheme. First, you need to find a good franchise brand with a system you can implement. Unfortunately, most franchise locations make $200-300k at the top end so you need to open multiple locations to get any kind of scale and to build a management team.

📅 Next Week:

Next week we are going to deep dive into Michael Greenberg and the world of digital operations. We will look into how much of an impact it will have on industries across the globe and how Michael Greenberg championed the digital ops revolution. 

Keep growing,

Alan

P.S. 

The most recent episode of The Small Business Mentor Podcast is live. My guest this week was Eric Jorgensen the CEO of Scribe Media. We went into a lot of detail on his journey in the business world and his current role as CEO of Scribe Media. 

Check it out here: 

• Apple: https://bit.ly/3HiB6qq

• Spotify: https://spoti.fi/3O2fK4g

P.P.S. 

Do you have a small business growth story and want to be featured? Ping me on X @apentz, or submit at http://www.fame.so/sbp-story