In Today’s Newsletter:

• ✅ ❌ The Deal - Franchising Is An Approval Process

• ⛳️ The Back Nine Franchise Breakdown

• 🗞️ 3 Franchise Industry News Stories

What’s the Deal…

With Franchising Being an Approval Process?

“I’m the one forking up the cash, I’m the one that’s going to be running the business, I’m the one taking out an SBA loan, the franchisor needs to tell ME why I should buy their franchise…but they rejected me?”

Yeah. That happens. Contrary to popular belief, you can’t just buy a franchise.

Franchising is an awarding process, as many in the industry like to say. And that’s true. But it’s still a sales process. Don’t get it twisted.

What many franchise buyers get wrong, though, is that it’s a double-ended sales process.

The franchise’s goal is to sell the buyer on why their franchise opportunity is the right fit…

Yet what a lot of franchise buyers don’t understand is that they also need to sell the franchise on why they’re the right fit for the opportunity.

Why would a franchise reject me?

Well, if the brand doesn’t feel as though the buyer will be a strong franchisee, why would they want to lock up that territory or even multiple territories with the wrong franchise owner?

Remember: the franchise makes most of its money and generates most of its value through royalties.

If a franchise owner has low sales in a territory, that franchisor is generating lower royalties than if they had sold that territory to a better operator who could generate more sales, and thus, more royalties.

There’s an opportunity cost for the franchise, just as there is for the buyer.

It’s a mutual evaluation process. The franchise can and will reject a buyer’s “application” at any point in the process if they’re not feeling the buyer is the right fit for the brand.

This could be for a variety of reasons.

Obviously, not meeting basic financial requirements is an immediate grounds for dismissal from the process.

But other common reasons for rejection can be that the franchise didn’t feel the buyer was bought into the process: the buyer was constantly rescheduling meetings or frequently showing up late, not doing due diligence homework between meetings, and showing a general lack of interest.

That’s right: being too aloof and unengaged could equal an end to the process. Rethink that “I’m-too-cool-for-school” attitude.

Other reasons might include an overly skeptical attitude.

Yes, it’s important for buyers to be cautious and to validate everything they’re hearing from the franchise with actual franchisees who run that business day-in and day-out.

But any buyer that approaches the conversation in bad faith, with an attitude, and with an assumption that the franchise is trying to pull a fast one on them…will likely be excused from the process.

It’s important to treat the franchise as a potential partner. “We’re both sitting on the same side of the table trying to figure out if this is would make sense for both parties.”

As a franchise advisor, I’ve also seen plenty of candidates get rejected at Confirmation/Discovery Day (the final step in the process where a buyer typically flies out to meet the leadership team, founders, etc.”

Here are the main reasons:

• Drank too much

• Talked politics or debated religion

• Insulted the founder or his/her spouse

• Messed around on their phone during presentations - showing lack of engagement

• Not asking questions or asking bad-faith questions (or basic questions that they should already understand by that point in the process)

• Showing attitude

• Overly skeptical spouses that attend Discovery Day (this usually happens when the spouse hasn’t participated in the process)

• Leaving Confirmation/Discovery Day too early

• No-showing the event

• Bombing the 1-on-1 interview - too nervous, too much of an a-hole, too much of a know-it-all, not coachable, etc.

• Only talking about making money as their “why” for buying the franchise

• So much more

Nobody is entitled to a franchise just because they can stroke a check.

It’s important to approach the process with the right attitude, the right commitment, and, to avoid many of these mistakes, the right franchise advisor.

Let the decision as to whether or not you move forward with a given franchise be up to you, instead of the franchise.

Your Franchise Advisor,

Christian Dadulak

Franchise “Deal” of the Week - The Back Nine

The Back Nine is THE premier indoor golf simulator franchise in the U.S., designed for golfers who want to sharpen their skills or just have a great time playing world-famous courses—rain or shine.

Golf simulator tech is booming, but no one is growing quite like The Back Nine. Why? Because they’ve dialed in everything—state-of-the-art technology, sleek design, and an experience that makes leveling up your game way faster than traditional golf.

Whether you’re looking for instant feedback to perfect your swing or just want to grab some friends and play a round at Pebble Beach (without the plane ticket), The Back Nine has you covered.

They have 30 locations open and 130 total locations they’ve awarded.

In my mind, there is a 12-18 month window to get in on this industry.

I have no crystal ball, but with The Back Nine’s growth rate, I think they’re poised to be one of the big players in the virtual golf simulator space…maybe even the McDonald’s of the industry.

For golf lovers and franchise investors alike, this one might be a hole-in-one. ⛳

Competitive Advantages:

• Flexible business model - no employees required

• 24/7 Facility Access - Code-Access for Members & Guests

• “Full Swing” technology - National Partnership with top-of-the-line golf simulator company allows discounts on the equipment (wholesale discounts)

• Average studio has 3 bays

• Flexible real estate - doesn’t need to be Class A Retail Space

• 30+ locations open with 130 total awarded

• Indoor Golf, Club Fittings, Leagues, Tournaments

• Recurring Revenue through subscription-based memberships

  • Even corporate memberships!

The Back Nine Breakdown:

By the Numbers:

Minimum Financial Requirements…

(You need to meet these requirements at a minimum to be considered for this franchise)

Net Worth - $100,000+

Liquidity - $65,000+

Item 7 - Estimated Initial Investment Range

This range typically contains everything to get the business up and running, including the franchise fee and 3 months of working capital

Investment: $208,117 - $438,117

Approximate Down Payment w/ SBA Loan: $41,623 - $87,623 (assuming 20% down)

Item 19 - Financial Performance Representations:

Fees:

• Royalty: 7% Gross Sales

• Brand Fund: Up to 1% Gross Sales

• Franchise Fee: $50,000

Total Locations Open: 30+

Total Awarded: 130+

Real Estate Requirements: 2,500 to 3,000 sq ft. for a 3-bay facility

Employees Needed to Start:

• None

• Possibly a salesperson to help sell memberships

Territory: 75,000 Population

Franchise Industry News

• Where Are They Now? Milkshake Factory Adds More Treats to the Menu

  The secret to a perfect milkshake starts with the vanilla milkshake base, said Milkshake Factory CEO Dana Manatos.

  “If you have a good, classic vanilla milkshake, all the other things that are made from that will be good,” Manatos said. “You can’t make a good chocolate shake if you do not have a good vanilla shake. … That’s why it’s so important.”

  While a vanilla milkshake may seem like a boring choice to some, Manatos said it’s her favorite on the menu, which features complex flavors like chocolate-dipped strawberry or salted caramel pretzel.

  The brand has 16 locations, five of which are franchised, and Manatos said it’s slated to open another 40 stores this year. The company is working with franchise development company Franworth and has sold more than 130 locations.”

• Franchise Expansion Is Next Phase for CC’s Coffee House

  CC’s Coffee House CEO Celton Hayden Jr. said there are pivotal moments during a company’s lifespan where a brand makes a bold move toward a new era.

  It can be a new product, a strategic hire, or in the case of CC’s Coffee House, the launch of a franchise system, which Hayden Jr. said is the natural next step for the concept.

  “We are embarking in our 30^th year of being in business and in that span of time, we’ve done just about everything you can do as a restaurant company from multiple areas of expansion,” Hayden Jr. said. “You look over the potential life of a brand, and find moments like this where you can clearly discern where there were pivots.”

• Barrio BurritoBar Sets Sights On Georgia With Master Agreement, Plus More Multi-Unit News

  Barrio BurritoBar, the American counterpart to Canada’s BarBurrito, inked a master franchise agreement to develop the state of Georgia. The deal, which targets the opening of 110 locations, was signed with a franchisee group including Madhu Sundara, Sai Bandaru, Srinivas Madhamshetti and Radhika Mukka.

  The four bring experience in foodservice and franchising. BarBurrito launched in 2005 and has more than 360 locations across Canada. Barrio BurritoBar, meanwhile, launched in the U.S. in 2020.

  Pickleball concept Dill Dinkers inked a deal for 20 locations in Florida’s Tampa metro area. Behind the agreement is Martina Kochli, Dill Dinkers’ global brand ambassador and a former professional pickleball player who’s opening the units with her husband Andrew, a U.S. Army veteran. Established in 2022, Maryland-based Dill Dinkers has five company-owned locations.

Reply to this newsletter or schedule a meeting with me via the link below…all at no cost to you, ever. All of my help is 100% complimentary - I get paid a referral fee by the franchises if you buy into their brand.