🍟 4/28/2022 – How To Own a Franchise While Keeping Your Job
MEET A ZEE
Brian Knuth: Footprints Floors
Brian Knuth is the Vice President of Development for Raintree, a company that partners with early stage franchises and helps them grow.
Through his work, he discovered Footprints Floors and learned their business model inside and out. Needless to say, he was so impressed that he decided to buy a territory for himself!
He still has his job at Raintree, as he’s leveraged the Footprints Floors system to run his franchise under a semi-absentee model. Here’s what I learned:
1. Semi-Absentee Ownership
Brian mentioned a few factors that have enabled him to run his franchise semi-absentee:
- Finding an operating partner – this person is the boots on the ground operator who is working in the business every day
- Low employee headcount – Footprints Floors uses a subcontracting model, so they do not have to hire as much as labor as other service businesses
- Clear KPI management – Brian can look at his business from the software Footprints Floor has, and within 5 minutes identify what they’re doing well or not so well
Even with this structure, it doesn’t come without drawbacks, as Brian found it emotionally difficult in the beginning to watch his business “from the sidelines” so to speak.
Over time, he has learned to be comfortable with trusting his operating partner.
2. Decision Making at 85% Satisfaction
In addition to his experience buying a franchise, as a Vice President of Development, Brian also has tons of experience guiding thousands of candidates to making the leap into franchise ownership, or deciding it wasn’t for them.
He encourages people who are serious about business ownership to avoid paralysis by analysis, and to prepare for the reality that you may not find the “perfect” brand.
Brian’s philosophy is to make a decision at 85% satisfaction – because there’s always going to be a few aspects of a brand that you’re not thrilled about or you feel is risky.
But if you can find a franchise that you’re 85% happy with, that should be enough for you to take the leap, because as with any investment, there’s never a 100% guarantee of success!
3. Multiple Income Streams
The average millionaire has 5+ income streams. Granted, getting started is the hardest part, i.e. going from 1 to 2 income streams.
But financial growth compounds over time, meaning it’s not linear. While it may take 10 years to go from 1 to 2 income streams, going from 2 to 3 and beyond can take far less time once you have a stable foundation.
Brian’s personal goal is to get to 5 uncorrelated income streams by the time he retires – an admirable goal that many should consider!
To listen to Brian’s story, click here!
FRANCHISE OF THE DAY
Shuckin’ Shack Oyster Bar
- Founded in 2007, franchising since 2014
- Based in Wilmington, North Carolina; 16+ locations open as of 2021
- An oyster bar and seafood restaurant
Fees + Investment
- Royalty: 3.5% in year 1, 4.5% in year 2, 5.5% in years 3+
- Brand Fund: 1.5%
- Franchise Fee: $45,000
- Initial Investment: $352,700 – $1,128,252
- The below data contains information from a franchisee in 2019 and 2020, as well as 14 total locations (2 affiliate and 12 franchisee owned) that were over or under 1800 square feet
The Wolf’s Take
A full-service restaurant that incorporates a bar is going to merit a larger investment, but even-so, Shuckin’ Shack shows the potential for a great annual ROI, as demonstrated by the franchisee from South Carolina in 2019.
Beyond the numbers, I like this franchise for a few reasons…
It’s clear from their franchise website that they’re not afraid to have a little fun. Their tagline right away is “Tell Corporate America to go Shuck Itself!”.
It’s always important to reflect on if you align with how a franchise presents their brand. Additionally, for restaurant concepts in particular, brand recognition can become a huge benefit as locations scale, so franchises that think meaningfully about their brand perception are hopefully on the right track.
Shuckin’ Shack differentiates itself from both other sports bar franchises, and other sea-food restaurants.
This isn’t a fast-food brand trying to compete with Long John Silver’s, but they’re also not a fancy white tablecloth establishment. What they strive to be is a healthy middle ground that serves up great oysters, drinks, and a fun experience that entire families can enjoy.
They also look like they’d especially thrive in vacation destination markets, ideally near the ocean!
Technically a restaurant is competing with any other business that serves food, but drilling down into sea-food restaurant franchises, there isn’t much out there.
Outside of Angry Crab Shack, which I covered all the way back in Week 4 of this newsletter, I’ve yet to see another legitimate brand in this space (if I’m missing one, feel free to reply to this email and let me know).
If you’re interested in restaurant franchises, Shuckin’ Shack could be a fun and rewarding opportunity!
Disclaimer: This Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on this site constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
All Content in this email is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the email constitutes professional and/or financial advice, nor does any information in the email constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content in this email before making any decisions based on such information or other Content.