Strategies for DOUBLING your franchise investment

The franchisees making real money aren't just collecting locations.

They're buying strategically, with a clear exit plan in mind, and they're using one of two proven playbooks.

Both can double your investment in 18-24 months. But they require completely different approaches.

Strategy #1: Buy Tired Owners (The Value-Add Play)

These are the deals that make my phone ring.

The owner is exhausted. Maybe they're making money, maybe they're not—but they're definitely done. 

Their locations haven't been updated in years, and often the team is as tired as they are.

Here, you're getting assets at a discount with multiple levers to pull. 

Think about apartment investing. When you buy a run-down complex, you know exactly what to fix: update units, improve landscaping, add amenities. 

Same principle applies to these kinds of franchise locations.

You can upgrade marketing strategies, build real culture in the business, make new hires and improve the team, and clean up operations and optimize processes.

One thing you can’t fix: location problems.

A franchisee I know was looking at two underperforming locations recently. The franchisor said both were "just poorly run locations." But when they dug deeper, they discovered one location had very bad real estate—that was the main reason for underperformance, not poor management.

Before you buy any underperformer, research what's happening in the future around that location. 

Call the city and search for what projects are planned for the main streets they're on. 

Water line replacement underneath the street? That location will be closed for a period of time. 

Major remodel of the retail center? You want to know that because you'll be hurt in the meantime.

The unfortunate reality of these kinds of deals is that if you do ten of these turnarounds, you're probably going to have one, two, or three that won't pan out. 

You just don't want that to be your first one. Do your due diligence.

Strategy #2: Buy Strong Assets (The Premium Play)

This approach is less risky, but requires more upfront capital.

Here, you're buying strong assets—high-performing, cash-flowing businesses. You pay a lot of money for them, but you can still double your money in about a year and a half to two years with the right strategy.

When you sell to the right buyer, they’ll pay premium multiples because they're acquiring proven cash cows.

When you already own multiple locations of the same brand, you have operational systems that you can leverage to add value on day one.

Add new locations into your existing ecosystem, introduce systems, capture some cost efficiencies, then sell them and make serious money.

Now, understanding your position in the buyer-seller chain is critical here. You need to understand who will eventually buy these locations from you. 

The buyers willing to pay the highest multiples aren't individual operators—they're strategic acquirers building larger portfolios. These buyers can afford to pay premium prices because they're planning their own major exits down the road, whether to private equity or through acquisition by even larger players.

At a high level, to make this kind of strategy work, you’ll need: 

• Operational systems to leverage

• Locations that fit your existing brand and market

• Understanding of the buyer landscape in your space

• And the ability to add value through integration, not just management

The Bottom Line

Strategy #1 is about operational turnarounds. You're betting on your ability to fix what's broken.

Strategy #2 is about strategic value creation. You're betting on your systems and eventual exit to strategic buyers.

Both can double your money. But they require completely different skill sets and risk profiles.

Before you buy any location, ask yourself these questions: 

• Why is this owner selling? 

• What can I do that they can't? 

• Who will buy this from me eventually? 

• What's the worst-case scenario?

Don't just buy locations because they're available or cheap.

Buy them because you have a clear value-creation thesis and know who your exit buyer will be.

The franchisees making serious money aren't just collecting units—they're building sellable businesses with strategic buyers in mind.

That's how you go from owning locations to building wealth.

Until next week,

Erik

PS: If you're evaluating acquisition opportunities, we dive deep into due diligence strategies and buyer positioning in our private Facebook group. The conversations happening there could save you from expensive mistakes. Join here.