Why this franchisee cut his empire in half

A member of our mastermind sold half his locations, and he told me that it was the best decision he ever made.

He went from 20 something locations across multiple brands down to nine. Now he makes more money, works fewer hours, and actually has a life. 

Now, this goes against everything most franchising gurus would teach you about success!

A lot of franchisees are obsessed with unit count. 

How many locations you got? How many trucks? How many territories? 

It's the first question at every conference, every mastermind, every casual conversation between operators..

But unit count is a vanity metric. And vanity metrics make you broke.

This particular franchisee had built what looked like an empire. Twenty locations across two different brands. Everyone thought he was crushing it (because that's what he wanted everyone to think).

But when he looked at his numbers, half those locations were bleeding cash. Three were barely breakeven. Maybe five were actually profitable. 

He was keeping them all because letting go felt like failure. Like moving backwards.

But, after an honest look at the math, he tried approaching it from a different perspective:

What if he only kept the profitable ones? What if he sold the dogs, shut down the bleeder locations, and focused everything on the winners?

His first reaction was about sunk costs. All that money already invested. All that time building them up.

But that money's gone whether you keep bleeding or stop.

His second reaction was about perception. What would other franchisees think if he went from 20 to 9 locations?

That's when he knew he'd identified the real problem. He was more worried about looking successful than being successful.

After some back and forth, he made the hard call. 

He started divesting. Selling some, closing others. Focusing all his energy and capital on the nine locations that actually worked.

His total revenue dropped by 30%, but his net income increased by 110%. 

His hours dropped by half!

He went from putting out fires to building systems. From writing checks every month to cover losses to taking distributions.

The franchisees still chasing unit count are playing a different game. They're playing franchise monopoly, collecting properties like game pieces. They think more units equals more success.

Smart franchisees play for profit per hour invested. For return on capital. For quality of life. 

They understand that two profitable locations beat ten struggling ones every single time.

Stop counting units. Start counting profits. 

Stop trying to impress other franchisees with your expansion plans. Start impressing your banker with your profit margins.

The goal isn't to build the biggest franchise empire. It's to build the most profitable one. 

Sometimes that means having the courage to shrink before you grow.

PS: Curious what profitable franchisees actually make per location versus the ones just collecting units? Join our private Facebook group, and get a glimpse into the real math behind franchise success.