In Today’s Newsletter:

• 🙌🏻 The Purpose and Vision for this Newsletter

• 🌮 Breakdown of a Franchise You Know…Del Taco

• 🥤 Breakdown of One You Probably Don’t…Milkshake Factory

What’s the Deal…

With this Newsletter

Look, there’s a ton of newsletters out there about business and franchising. And many of them are awesome! Just because there’s McDonald’s or Burger King doesn’t mean there can’t be Carl’s Jr, Jack-in-the-Box, or Dunkin’ Donuts.

It’s not a bad idea to expose yourself to other perspectives and content in franchising. In fact, I encourage it.

But not all newsletters are created equal. Not all newsletters share the same information. Not all newsletters are written by people that are actually in the “game” of helping people buy franchises day-in and day-out. As a great man once said…

Who I Am

My name’s Christian Dadulak and I’m a franchise advisor. And as a franchise advisor…

I. Am. In. The. Arena. I do more than just quote information about franchise opportunities; I coach people just like you through the entire franchise buying process.

I’ve been helping people buy businesses and franchises for over 5 years, and I’ve even started and owned a business with my family (a licensing opportunity - kind of like franchising’s cousin.)

I’m in the trenches every single day, helping people from all over the country from all different backgrounds, skillsets, and goals live life on their terms…through franchising.

But enough about me!

So What’s Up With The Newsletter?

As you might be able to guess, I’m big fan of franchising. I think franchising is the most underrated & under-discussed wealth creation vehicle in American history. It’s the great equalizer in so many ways.

It’s the most democratic wealth creation vehicle around, but most people just don’t know much about it. And what they do know is often a misconception.

Franchising can be a dream come true. But it can also be a nightmare too.

If you have the wrong franchise + the wrong franchisee (franchise owner) + wrong territory, it can spell disaster.

In the same way that not every newsletter is created equal, not every franchise is created equal.

The Problem:

• Not Every Franchise Is Equal - Franchising is a mixed bag. There are a lot of incredible franchise opportunities out there…but there are probably even more mediocre franchises out there, or worse. Even the ones that have amazing potential aren’t suited for every franchise buyer

• No One-Size-Fits-All - There is no opportunity that is just magically the right-fit for everyone. In the same way that not everybody is cut out for a career in sales or to play professional baseball, not everybody is cut out for every type of franchise opportunity. Not everybody is cut out for franchise ownership in the first place

• Guarded Information - There is a “moat” that guards a lot of the key information that potential franchise buyers would like to know about the franchises they’re interested in; it’s often the franchisors that need to let down the metaphorical drawbridge so franchise buyers can get the inside scoop

• Vetting Franchises Is Different - Performing due diligence is a lot different, in many ways, than vetting a real estate deal or buying an existing business; there is no standardized method or requirement that franchises need to follow to share financial performance information, for example, so comparing opportunities apple-to-apples and assessing their potential can be challenging

• Not Everyone Is Ready to Buy Today - Not everybody is ready to buy within the typical 9-12 week franchise exploration process that most franchisors outline; there are limited resources for potential franchise buyers to learn about franchising BEFORE having direct conversations with franchises directly

The Solution:

• Learn About Different Franchises - each week, I’ll present a franchise opportunity you may have heard about before…and one you may not have to expose you to different opportunities

• Overcome Franchise Myths - I’ll dispel common myths so you know the truth about how to think about franchising; I’ll get you all of the need-to-know information about franchising

• Discover How to Vet Opportunities - What most people need is not just to know what a franchise costs to get into or what the potential earnings look like. Most people need to know how to properly vet franchise opportunities and what the important considerations are when thinking about buying one

• Access to a Franchise Advisor - If and when ready, I’m always available to be a hands-on guide for you as your franchise advisor, all at no cost…ever

I believe that it’s important to understand the fundamentals of franchising, to get exposed to opportunities you may not have originally considered (Hint: Not every franchise opportunity is food related - there is an entire world beyond food franchises), and to learn how to properly vet franchise opportunities.

That, in a nutshell, is the goal of this newsletter. If you feel that might be useful, this is the franchise newsletter for you.

And I’ll only share once per week so that I’m not clogging your inbox with fluff, but with the most important franchise-related information.

Enjoy.

-Christian Dadulak, Franchise Advisor

Franchise Deals of the Week

A Deal You Might Know - Del Taco

Brand Story: 

Del Taco is a fast-food chain known for its Mexican-American fusion menu, combining traditional Mexican fare with American fast-food elements. The company was founded in 1964 by Ed Hackbarth and David Jameson in Yermo, California. The initial concept was to offer fast and affordable Mexican food in a quick-service format, distinguishing itself from the typical American fast-food offerings at the time.

As of today, Del Taco has over 600 locations across the United States, with the majority concentrated in California and the Southwest.

By the Numbers:

Minimum Financial Requirements -

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

Net Worth - $1,000,000+

Liquidity - $500,000+

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

Bottomline: ~$1.1M to $3.08M+ for a single location

Approximate Down Payment w/ SBA Loan: $95,200 to $147,800 (assuming 20% down)

Fees:

• Royalty: 5% of net sales

• Brand Fund: 4% of net sales

• Franchise Fee: $35,000 for the First Restaurant $1,000 deposit on the Franchise Fee for each subsequent Restaurant to be developed

Total Locations Open: 592 Outlets (as of the end of 2023) - See Item 20 below

2021 - Had a net increase in 5 franchise locations

2022 - Had a net decrease in 5 franchise locations

2023 - Had a net increase of 120 franchise locations

The Last Word:

With Strong Average Unit Volumes, Del Taco could be an amazing investment for the right buyer, but I think for many first-time franchise buyers, there are easier brands to get into from a financial & operational perspective.

The large upfront investment could be cost-prohibitive for many first-time franchise owners; even using an SBA loan, the would-be franchisee would need to come up with 20-30% of the total project cost as the cash injection for the loan, which in this case, could be an estimated $262k to $617k (assuming a 20% down payment & based on ranges in the Item 7). Consider how a hefty loan payment could weigh on the business and its ramp to profitability.

Depending on where you live, territory may or may not be available too - your market might already be sold out to other franchisees, which could potentially limit your ability to grow and expand.

Lower-skilled employees often equate to higher employee turnover. Not to mention, fast food typically means long hours of operations - early mornings and late nights for your employees (and sometimes you if you need to step in.) Food also means inventory and spoilage to wrestle with (supplies to manage & food going bad.)

Still, this brand is highly scalable with strong systems and supply chains. You can leverage economies of scale - share staff between locations, stretch your local marketing dollars across several locations, and so on.

From my experience, I find that the most successful franchisees in these types of brands tend to be management groups or experienced Multi-Unit (multi-location) franchisees who have teams and infrastructure in place and who intend to develop multiple locations. As always, it will depend on the buyer. I am not making an offer or any personal recommendations.

A Deal You Might Not Know - The Milkshake Factory

Brand Story: 

MilkShake Factory® is a premium dessert destination, serving up handspun milkshakes made with housemade ice cream, as well as heritage chocolates crafted by fourth-generation chocolatiers. Having been successful in the $1.5 trillion Foodservice & Hospitality industry for over a century, MilkShake Factory offers one of the sweetest opportunity in franchising.

Beginning in 1914 as a family-run chocolate business, MilkShake Factory was spun off in 2003 as a way to bring more business throughout the year to the family’s chocolate shop.

Elevated by fourth-generation chocolatiers, MilkShake Factory delivers handcrafted milkshakes and chocolates with a sophisticated yet simple operation with a culture committed to fostering a familial culture.

Furthermore, MilkShake Factory has a refined and proven concept with proprietary house-made ice cream and top notch ingredients, demonstrating strong unit economics that can efficiently operate at scale, making it an enticing franchise opportunity.

By the Numbers:

Minimum Financial Requirements -

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

Net Worth - $750,000+

Liquidity - $200,000+

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

Bottomline: ~$476k to $739k

Approximate Down Payment w/ SBA Loan: $95,200 to $147,800 (assuming 20% down)

Fees:

• Royalty: 6% of Gross Sales

• Brand Fund: 2% of Gross Sales

• Franchise Fee: $60,000

The Last Word:

The Milkshake Factory is one of the hottest franchise concepts in the food space right now. They have awarded over 100+ locations over the last 12+ months…and they’ve only been offering franchises since 2023. That is RAPID growth.

But it’s not just about selling locations; it’s about getting them open and successful.

Milkshake Factory’s partnership with the Rep’m Group helps to ensure this happens, especially with the help of Rep’m’s “Build’M’ department, which offers white-glove, full-service help with real estate and construction project management…everything from helping franchisees with site selection, lease negotiation, design, permitting, building, and more.

Even more exciting is the caliber of early franchisees buying the rights to open Milkshake Factory locations. Many are sophisticated multi-unit franchise owners of other franchise food concepts, even some big-name pizza brands.

Because this is a brick-and-mortar franchise, it is a large investment with high minimum financial requirements, so the barrier to entry is higher than most franchises.

The manager-led nature of the business along with its simplicity and economies of scale lend it to being a fantastic multi-unit opportunity for investors, portfolio builders, and corporate professionals looking to diversify their income.

Though it’s early and they don’t have many locations open, this is a brand to keep your eye on and is a brand that is already sold out in many markets around the country.

As always, it will depend on the buyer. I am not making an offer or any personal recommendations.

P.S. If you’d like to learn more about the Milkshake Factory and get connected with them, you can schedule some time with me via the link near the foot notes.

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.