Acquisitions Anonymous - #1 for business buying, selling and operating - Can we make bank with Cricket Wireless stores? - Acquisitions Anonymous Episode 136

Episode Date: October 27, 2022

Want to receive this listing in your inbox? Signup for our weekly newsletter:https://www.getrevue.co/profile/acquanon-----Michael Girdley (@Girdley) and Bill D’Alessandro (@BillDA) discussed 6 Cricket Franchise Cell Phone Stores in Chicago.In this episode, we'll learn who runs these franchises and how they operate. We will see the most significant pain point regarding the customer base in this kind of business.In addition, our hosts will offer some advice on how to run this type of business efficiently after discussing the revenue splitting among the stores and the possible tradeoffs & advice on how to get started and pick the best franchise.-----Thanks to our sponsor!Live Oak Bank - Whether you’re looking to build, buy or expand your business, let the team at Live Oak Bank be your financial guide. With Live Oak, you get a partner who believes in your success and is willing to take the journey alongside you. We provide small business loans tailored to your goals.Fuel the growth of small businesses across the country; bank with Live Oak Bank.You can contact Heather Endresen, Director & Founder at [e-mail]. Mention this podcast in the subject line and ask her about office hours to get in touch.*Live Oak Bank is the #1 SBA 7(A) Lender. The data supplied by the SBA reflects 7(a) highest dollar volume during FY 2021.-----Show Notes: (00:00) - Introduction(00:38) - Our Sponsor is Live Oak Bank(02:14) - Quick catch-up with Michael and Bill (04:39) - Deal & financials: 6 Cricket Franchise Cell Phone Stores(05:54) - Who runs these franchises? How are these operations usually run?(07:27) - How is the revenue split among the stores? (14:46) - How is this service distinct from prepaid services?(16:28) - What seems to be the main pain point regarding the customer base?(20:24) - What's happening with the Amazon third-party delivery staff?(23:13) - Is there a bull case for this deal? What is the trade-off?(24:13) - Would it be better if we closed other stores?(24:44) - How much of a moat does this business have? How easy is it to open a Cricket Franchise? (30:21) - How to pick the right franchise? Who are franchises meant for? -----Additional episodes you might enjoy:#135 - Should we buy this warehouse software business?#134 - Should we buy this skiing technology company?#133 - How to value and underwrite commercial Real Estate? With special Guest Chris PowersSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Hello, listeners. Welcome back to another episode of Acquisitions Anonymous. I am one of your hosts, Bill Dallessandro. And this week, we've got a really cool deal. It is a chain of cricket wireless stores in Chicagoland. So we start talking about this business specifically. And Michael and I get into a wide-ranging discussion of franchising dynamics, geography dynamics, and kind of the future of the self-end industry. So it's a really good one. A couple asks for y'all before we dive into it. If you could please go on iTunes or wherever your podcasts are sold and leave us a review. If you like it, it really helps us to get more listeners for the pod. I also want to say thank you to our sponsor Live Oak Bank for this episode. If you are doing an SBA loan, I would highly recommend you go to Live Oak. They do the most SBA loans in the country, I believe. I personally have worked with them a couple times, and they're great people. They're really fast and professional.

So use Live Oak if you're looking for an SBA loan. With that, let's get into this week's episode. This episode is sponsored by Live Oak Bank, the number one SBA lender in the country by dollar amount. But they're more than the top SBA lender. They also provide USDA and conventional financing, tailoring each loan to their customers' unique needs. Whether you're looking to buy or expand a business, let Live Oak be your financial guide. With Live Oak, you get a partner who believes in your success and is willing to take the journey alongside of you. Live Oak's M&A financing experts lend across many industries nationwide.

They also have over 30 industry-specific teams whose lenders are experts in industry-specific small business loans. Some of these include health care, seniors housing, and service contractors as well. With their dedication to efficiency, collaboration, and in-depth knowledge of M&A financing, they'll take you where you need to go. Visit live oakbank.com slash AA and make sure that's a lowercase a and another lower case A to connect with a lender today. So again, that's live oak bank.com slash. AA with two lowercase A's to find out more about Live Oak and to connect with the lender there and tell them that the Acquisitions Anonymous folks sent you along. Thanks a bunch.

All right, Michael, I'm psyched for another episode of Acquisitions Anonymous. The hurricane is bearing down on us here on the East Coast. You are safe and dry in Texas. Mirko is safe and dry in South America. So I'm here in my storm jacket. But we've got an interesting deal today. Michael just dug this one up. Introduce it to us, Michael. Yeah, yeah. Well, before we do, this morning we were texting for our listeners, we were texting with Mills. And Mills is like, I can't make it today. And for those of you don't know, Mills is in the roofing business in the southern half of South Carolina.

And so the immediate, like, image that came to mind. And I don't know if this movie is something you're, something you've seen, but Smoky and the Bandit. Are you familiar this movie? Yeah. Yeah. There's a scene in Smokey and the Bandit, too, where there's like this massive trucker convoy that comes in to save the day. And that's what I imagine Mills's day is like today, because he's got to be just loading up everything and headed down to Florida to make as much money as possible in like the next two months.

So I'm hoping it goes awesome for Mills. But anyway, I just wanted to share with you that image from Girdley Brain that happened this morning. And it was just like, let's go. Let's go eastbound and down. Let's sell some roofs. Go Mills make some money. That's what I had to say. This is like the curse or the laugh, the joke of being in business is like the hurricane hits.

And all I can think of. of is Mills and like our friend guestwork investing from Twitter that owns a tree service. Like every tree guy and roof guy in the whole southeast flocks to Florida to make as much money as they can every time a hurricane hits. And that's like all thinking of. So I saw a hilarious TikTok this morning because, you know, that's what I do on Friday mornings. So I went TikTok and this young lady creates a TikTok and she's like, she's like, everybody says pray for Southwest Florida. But hey, this is all I see. Check. out my tender and she just shows us like all these shots from tender that are like dudes hanging

from the sides of light poles like fixing roofs like like 25 year old like worker men have single have all descended upon southwest florida and are suddenly all on twitter and she was are on tender and she's like hallelujah like the cavalry has arrived awesome so i guess it's like the north Dakota oil field camps and everything. All these single dudes are transient and in for a couple weeks. It is a weird place, North Dakota for sure. Okay. So, and then today's deal selection is I played Biz Buy Sell Roulette.

I opened up Biz By Sell and I clicked on the first deal that they showed me and that's the one we're doing. Like, this is the best radio ever. Anyway, okay. So what this one is is it's in Chicago and this deal is a rapidly growing chain of six cricket wireless franchise cell phone stores. So it has a picture of a cricket arguably an interesting thing. I don't know if you notice this from the picture bill next to a Radio Shack. So it makes me wonder how all these photos are. Because Radio Shack went out of business like four years ago and it's now owned by

Ty Lopez or whatever in his team. So so it is what it is. But I think so behind this is when you see an AT&T wireless store or you see a cricket store or Verizon store, or Verizon store, most people don't know that those aren't actually run by AT&D Verizon or cricket or whoever, T-Mobile. A lot of those are run by independent chains of operators who just run those stores. And what AT&T and all those guys figured out is, man, it is much more efficient if we contract with third parties to do this, just like FedEx outsources its routes and Amazon outsources their routes as well to small entrepreneurs who are just much more efficient

than their big corporation is. So that is what this is. This is cricket has gone and, and gone and created these relationships with an independent franchisee. Then the craziest thing is some of these brands, they don't even actually own their network, right? So are you familiar with this? This as well, Bill?

Yes, yes. The acronym MVNO, right? Yeah, a virtual network operator. More virtual network operator. Yeah. So basically, they're just a branding arm, a branding and a customer service arm that sits between the customer and somebody else's network.

So they might be in the background using AT&T or T-Mobile's network. You don't even really know it. And I think Cricket is one of those. And it's a brand if, and I'm not a customer, but it's a downmarket brand that kind of targets lower consumption, lower price point folks that in AT&T or one of the flagship brands don't actually want to, they can't do that and not pollute their flagship brand. So anyway, that is that is all I know about mobile networks. So, I do know that for the longest time, T-Mobile and Sprint were like the biggest sellers of wholesale minutes. So these guys like Cricket, like Boost Mobile. There's a couple other brands.

What they do is they buy millions of minutes in bulk on T-Mobile network and then they resell them. So their cost of goods is minutes, right, and data and then whatever revenue they can get by selling plans. So it's interesting model. Yeah. So these got, this is me, but this is not Cricket itself. this is the franchise cricket retail stores. Correct. Yeah, you're under contract to resell cricket

and service their customers and phone like that. So business-wise, they're asking $1.2 million, and cash flow is $400,000. So they have six stores, and they're doing $1.2 million. Man, is that? Or I guess we don't have revenue. Okay, cash flow is $408,000. So it seems like each store is generating $60,000 to $70,000 a year in cash flow.

Gross revenue, they don't tell us. EBITA, they don't tell us, FF&E, they don't tell us. Rent is $3,000 per month, which doesn't make sense. Well, it is Chicago. Anyway, I don't know. But 3,000 per month seems like about what they would pay per store and not for all six stores. And they'd have been in business since 2012.

And as an aside, like I read once about there's one of the operators of these kind of stores for AT&T that is so good that they have like a thousand plus of these little stores all over the country, like just a huge business of being a franchise partner of AT&T. Some people have made a ton of money. And these guys have done okay. They started in 2012. Business description, best for an EB-5 visa, permanent residency card in six to 12 months.

Let's put a pin in that because we should come back to that because we've never talked about that on the podcast before. But the key word when you see EB-5 is China. It's very interesting. Okay. Three years of strong tax returns. turn over 14 full-time employees, fast-growing yearly sales volume, strong net income of $34,000 per month. So does that math work? 34,000 to 408? Yeah, that's right. Current owners spent lots of

money for all repairs and improvements, and like Bill, like any good business listing, everything on this listing is in all caps, which to me just emphasizes we are serious about business. This is a professional business broker. Okay, location Chicago, Illinois, Inventory not included in asking price. The real estate is all leased, so you don't get any real estate with this deal. Each location appears to be 1,500 square feet, 14 total employees, which is fascinating to me, that they have six locations and only 14 employees. Oh, six locations.

Yeah. Maybe that's per location. I mean, if you look at like a typical fast food or retail operation, like I think most people don't understand how many people like a McDonald's employees. Like, like, yeah, a lot of them are getting 15 and 20 hours. Because they're all part time. Yeah. Yeah, they're all part time. They're not all there all the time. You need like a fleet of them, right, to cover all the hours. I mean, yeah, if everything I'm involved in, like the business that employs the most people is our, you know, retail coffee business. And it's like, it's like, because each store employs like 40 people.

And they're not full time and they're transient and all that kind of stuff. But it's like, it's amazing. Yeah. And like, have you seen how much a typical chick-fil-a hires? I forgot the exact number, but it's like 150 people. It's like 150 people. For one chick-fellie. For one chick-fellie.

Wow. Yeah. So at a red rot or coffee, how many people are in the store? How many employees are in the store at one time? Between one and six. But you need 40 on staff on payroll. Yep. Yeah, because some people are only working two days a week.

You know, then there's like, you know, we're open 5 a.m. to 8 p.m. So then you're shifting that out as well. So all of that is like, you know, you could run two shifts in a day, basically. Then there's people that only show up during the busy times, all that kind of stuff. But yeah, on a payroll active at any given time will be that, you know, that many. Cool. All right. So do you, what team employees seems really like?

It's like, wait, what? You're doing what? Doesn't make sense. And every time I go into my local AT&T store, there's like four people, five people standing around. And again, that's probably because it's a corporate one. But even still, like, I don't know how you run this business with six locations with only 14 people being open 70s a week.

Just doesn't make sense. But we'll get back there. Maybe that's just one. That would make more sense if it's just per location. Competition, instead of listing the competition bill, they say fast-growing business. So, yay. I don't know what that means, all caps. Growth and expansion, higher weekly and monthly franchise fees for more numbers of stores.

They are willing to sell our finance, I think that's what this means. It says financing 50%. And they will train you for three to six months. And the reason for selling is the most Chicago reason ever. I guess number two, number one, most Chicago reason ever would be unions slash the mafia is putting me out of business. Number two is I'm leaving Chicago. So it turns out the reason for selling here is. Number two, relocation to other state, and the business is an established franchise located

throughout kind of Chicago land area. And they give us a picture here of the actual stores. So if you're on YouTube, like, it's just basically 1,500, 1,500 square feet inside of these individual kind of strip centers around the Chicago land area. And here, I think they give us better numbers here, Bill, $108,000 a month in gross income. So I guess they're doing 1.2 million a year, so about 200,000 per store. Gross expenses are 74,000 a month, and net income is 34,000 a month across six stores. And then they actually give a sales per store of all of these.

And it's pretty interesting. There are two stores that are massive outperformers, and then the other ones look like they're barely breaking even. Interesting. What do you think? Are you ready to be in the cricket wireless thing in Chicago? So there's a couple of, I mean, no, I'm not ready to be in any business in Chicago for the aforementioned reasons. But I mean, in general, so it looks like all these are in strip malls, right? So you're probably don't need to be in like the nicest fanciest strip mall.

You probably got to only be open nine to five, right? Or nine to six or eight to six or something. Right. Like this isn't a restaurant. It's not an all night business. You are, you don't really have any, uh, cost of good. goods or inventory, right? So I imagine like you're basically just handing out phones or selling minutes or plans, right? So it's probably pretty capital light. You don't have to worry about all

your marketing because Cricket does it for you. It's a franchise. I don't hate the business model itself. You know, there's probably some recurrence. I don't know how Cricket pays you. What do you think, Michael? You think they just pay you like an origination fee per contract plus you sell the accessories? You think that's high structure? I would be willing to best. I would be willing to best. that you're basically breaking even when costs are put in on selling and managing the phones, and you make all your money on potentially accessories and repairs. And I don't know if these guys do repairs in their store like Apple does, but like, I bet you your gross margins on phone cases are 90 percent. And I bet your gross margins on the stuff that Cricket has you selling is 15 to 20

percent. You're just breaking even on it. That would be my guess as to how this is all set up, that really how you make your monies on those ancillary things, not on the direct business, if that makes sense. Do you think that the dynamics of this being cricket is any different than like a Verizon or AT&T? So Verizon or AT&T is typically what would be called postpaid, right? You pay, you get a bill for the enereers for the month of service and, you know, they credit check you. The crickets, the boosts are typically prepaid, right? You buy minutes or you buy months in advance so that the provider isn't taking credit risk.

So you're often, I think, back in the. the store more often to buy more minutes, you know, or re-up. You can do it online, but I think a lot of people still come in. You know, do you think that economics are any different because of that? I bet your revenue, I would get, I mean, we're in our total conjecture thing here, but I bet you're just your revenue mix totally shifts, right? Like, as I think through it, somebody who is going to be an AT&T customer, they're going to be paying, you know, my monthly mobile bill is $250 for my whole family, basically, and we have top tier kind of unlimited plans. You know, I bet once you get down to the how do I do a $49 month plan or how do I like do the bare minimum with data caps and all

that kind of stuff, those aren't going to be people like the 250 prepaid ones, you know, who are going to walk in and drop 50 bucks on a on a case that cost you $2 and not think twice about it. But, you know, I think you're going to have a lot more penny pinching type folks. But yeah, I think the other thing is you're going to see these people a lot. Like there's probably a lot of cash-based people who are coming in every month. And it's like, okay, I need to up my phone for the next three months. Here's $150. And you're doing a lot of that kind of stuff.

Just they're harder to upsell to those other things we were talking about. Yep. Yep. Okay. So am I wrong here? Like, is this maybe not a terrible business? What do you think, Michael? I think it's not a bad business to be in.

I think the pain in the butt here is the type of customer you're dealing with. Like my buddy owns buy here, pay here, auto deal. Are you familiar with that model? Yeah, like they totally target like this end of the market, like the unbanked, the paycheck to paycheck type folks. And like they're kind of both good and bad customers, right? They're good in that oftentimes, you know, you're, they're pretty straightforward. They show up with cash and you take care of them. They're bad in that they're always like just living right on the edge, right?

So I bet you're dealing with a lot of pain in the butt kind of. customers with all of this versus kind of one of the flagship brands. So that would be my kind of question about this. If you look at the pain in the ass factor here, like owning this business, right, you have six crickets. Okay. So they're spread across Chicago land and they gave us the addresses of them. Then you're netting 34,000 a month across all of them. You know, at a certain point, this problem with this deal is you're like at a scale where like you're either dealing with the pain in the butt of how do I staff and keep six stores running well and all the, you know, when the air conditioning breaks and all that, I mean, there's just going to be a

continual stream of pain in the butt stuff going on here. And you're like right at that cusp of can I hire a good person to run this for me? And, you know, once you do the math here, my guess is the net income is the owner is owner operating these. Let's say you're going to replace them with somebody good. That's going to cost you 125 to $150,000 a year all in with benefits and everything and the car they're going to need to go drive through all these places. Like it gets really thin at that point, right? We're doing a multiple of SDE here, and the job is kind of a pain in the ass. Like managing six low-in stores like this, like, it's a grind.

That's the best way I could just describe it. And this isn't at scale, unfortunately. Like, this would be much cooler if it was 15 of these things. But six, like, in kind of a no man's land. Yeah. I mean, well, that's the problem. even if it's at 15. Like, yeah, it's a bigger business, but damn, you still got 15, right?

Like the unit economics on one of these are just not very lucrative. So to have a business of any scale, I mean, this business is hardly scale. It makes $400,000 a year. As you said, and it's got six stores. You know, you're running pretty hard to make $80,000 net a store less, again, as you said, a manager. So even if you scale this up, I mean, if you had 100 of these, it would be really, complex and still not that big of business. That's the only thing that bums me out about it. Yeah. Well,

and I think that's why you see all of these guys from FedEx to Amazon to AT&T, like, and Subway's another great example, right? Like, these big corporations have figured out that if they are the franchisor, they can capture almost all the economics. And then they have somebody who's just willing to bust their butt and is trapped, right? Like, you, you, let's say you're this guy. And, you, you, you, let's say, you're this guy. and the company's making $400,000 a year, you're a tough situation. You're not really making enough to keep growing the business because it costs you a build-out and all this kind of investment to get each store off to speed. But also, you can't go make that kind of money doing something else.

So basically, you end up just like as a person making a ton of money but working your ass off, right? It's kind of the eye banker trade-off, right? You're going to have a terrible life, but you're going to make $2 million a year. Would you like to sign up for that? And some people do. And a lot of them, unfortunately, are folks that are kind of vulnerable on the entrepreneurial spectrum. And you end up with, I think, like, the subway situation where, like, Subway is a terrible franchisor in terms of taking care of its franchisees and just beats the hell out of them.

And they work their ass off for not much money. And so that's what this totally feels like. And I don't know. Have you dug in recently into, like, the economics of what the Amazon third-party delivery people go through? Have you looked at it recently? I have not dug in. deeply, I have heard it's not great. So I have a buddy who owns one, like in a nearby town, and he has it set up, I think,

pretty good where there is a general manager that he partners with who owns part of the business, but by and large, like, it's my buddy's name on the majority of it, and he captures the majority of the economics. And basically, like, every month, Amazon basically just tells him how much money he's going to make. Like, that's it. There's just no, I was like, so can you like make more money? He's like, only if Amazon tells me I can. Can you make less money?

Yeah, well, Amazon just kind of figures out what is like that equilibrium point, and then they just keep hammering me until I get to it. And that's just the way it works. And this feels like exactly the same thing. Like cricket has realized they can trap you in this stuff and they're going to capture all the economics. So anyway, other than that, that's a great deal. Yeah.

Do you think, this is what I'm trying to figure out. Like, is this a durable business, like a franchisee of cricket? I mean, yeah, okay, the mars are not great. Your franchisor is trying to extract from you? But is this business around in 25 years or does this all go online? Or is there always going to need to be the need for a cricket wireless store? You know, that's what I'm trying to say. Like, ESIM, just the new iPhone is ESIM only.

There's no more SIMs. Like, they can ship it to you, activate it remotely. you know, at what point do you not need a cricket wireless store and you just need a cell phone case store? And if you're that, why aren't people buying it on Amazon? Like, does this need to exist long term? I think long term it definitely needs to exist. I don't know if it'll exist at the same scale. You know, I've talked to the AT&T store people when I go in and they're like, yeah, like the past post-COVID, like, are the need for these like physical stores to exist has like basically diminished because they've taken, let's say, the 80% of what they were doing.

and totally pushed it online. And then on top of that, you have Apple trying to, it used to be, for example, like when I would upgrade an iPhone, I had to go take it in, swap out the SIM in the store, and then they would register in the computer. Now, like, Apple just totally, like, I buy my phone from Apple, and, like, in the background, it just clicks. And, like, okay, my number just gets ported over ESIM, and I'm done.

So I think I'm more worried about this business if it's a bunch of AT&T stores and Verizon and flagship stores, because that's all happening faster. Like I can pay digitally and all that kind of stuff. You know, for this end of the market, I think this will be the last to die. So there's that going on for it. But also, like, the story here, like, I'm not so like, as I dig into it, I'm like, wait, why are they selling this business, right?

Like, in theory, they have negligible, you know, cost basis in terms of starting it up. The thing's doing $35,000 a month, you know, why not instead of selling the whole thing? thing. And I guess maybe the selling for the whole thing is he's getting a ton of money for it if he gets this asking price or she selling the business. But it's also like, this is one where it's like, okay, well, why don't you just hire somebody to run it for you and still just pocket $20,000 a month? So there's that aspect of it that just doesn't make sense. And I would want to figure out what's going into this market that maybe I just don't know that an insider totally knows. Yeah. Well, there's another interesting aspect based on what you've got on the screen here,

the PDF that breaks down the gross revenue for each of the stores. You mentioned it earlier, couple of these stores kill it. Couple of these stores are barely breaking even. And barely breaking even, probably in a marginal neighborhood, you know, with staff that's unreliable, like there's a lifestyle tax on barely breaking even. So when if I were looking at this business, I would be looking pro forma. What if I close these stores? Does this, you know, does that make the business better?

Maybe it does. It might make it a little smaller, but probably not very much smaller on the profit line. I'm sorry to interrupt, but it looks like it's, To your point, I hadn't noticed before this. That's a great observation. Store number two and store number six. So they list each store's rental rate, and then they list each store is gross. And it's actually interesting.

Their highest rent stores are actually the ones that are the least profitable and the money losers. Look at this. So here they have this one at 7613 Roosevelt Road, 1,400 square feet paying $5,500 a month for their retail spot to the strip mall owner. It's grossing $4,200 a month. are losing money on two of these stores. So I think I think these grosses actually mean to be labeled net because if you add them up, it gets to about $34,000, which is the net income per month. So I think, you know, but to your point, Michael, one of these stores makes $10,000 a month, if we're interpreting this correctly. And one of these stores makes $4,000 a month, right? Less than half as much.

So how much pain in the ass overhead, you know, general management factory is there here in store number six, which makes $4,000 a month versus store number five, which makes $10,000 a month. Yeah. You know, so I would be thinking about, hey, dude, I don't want to buy your three crappiest stores. I just want to buy the three good ones because I went to cricket.com while you're talking, Michael. There's a link in the footer that says become an authorized retailer. Like, you don't go to McDonald's website and it says become a franchisee.

Like, you've got to be invited. Yeah. But cricket, it looks like you fill out online form and boom, you're authorized retailer. So I would wonder, you know, how much of this is the importance of this business is site selection, right? Where I would say, you know, I can spend a million two to buy this guy's kind of half good, half crap site selection. Or do I take my million to and, you know, go to cricket and say, I'm open in five stores and I figure out how to do my homework right and open five good ones? Super interesting. Well, I think it also, what you just said highlights kind of the mind, the mind.

the mind F, like the disconguity, whatever the word is, it's Friday, sorry, but about choosing what franchise to be in, you actually want to choose the franchises that aren't advertised and aren't going through franchise brokers. So like every city has these like franchise conventions. We just had one in San Antonio where it's like, oh, big franchise convention. And it's just the people trying to sell the me or not very good franchises, which are not the ones you want to be in. The franchises you actually want to be in are the good ones, and they don't have to go pay those people brokerage fees. They have people lined up across the street trying to buy in, and that's the Orange Theory's, right? The McDonald's, Crumble Cookies is another one. Like, Crumble cookies

is advertising through some stupid franchise convention because every one of their locations is printing money right now, and people are lined up to do it. And so I think you have a situation where, you know, like, if you see a franchise that's like, hey, sign up right now to be a franchisee, either it's just getting started or it's one to run the hell away from like a subway, for example, that it's just going to try to track you, trap you and capture all the economics. And cricket, I think, is definitely in that bucket. And I'm with you, Bill. I think you asked a great question.

Like, is this a long-term future thing? You know, would I rather own one of these in terms of the future shift in technology? Or would I rather own a dairy queen or try to get an orange theory? like those those two latter ones definitely seem like they have much more of a feature than this does. Yeah, and there's all kinds of franchises. I mean, I don't think, Michael, for you, but I certainly don't mean to poop on franchises. Franchises can be a really interesting business model, especially for people who are a little bit more risk-averse and they want a template. Franchises can freaking print money.

Like if you are a great operational executor and you can build up a portfolio of lucrative franchises, I have seen, the joke is, right, that McDonald's has made more millionaires than anyone else, like they're in their franchisees. They got the main character from the blind side, right? I forget his name, but like a multi-million, like a lot of money on McDonald's franchises. So they can be good businesses, but you've got to pick well. And then you've got to be a good operator. Yeah, totally.

Yeah, it's funny that people really bemoan the death of Main Street America and entrepreneurship, like, in America. but like all we did was just take a bunch of crappy like main street style stuff that wasn't very good cafes little hardware stores little business to business services businesses and then turn those into standardized national chains through franchises and those franchisees are like great operators right and like my favorite example have i talked to you about the little uPS store in my in my in my town like right down the street i don't think so specifically oh yeah yeah so it's i went in there yesterday and like everything is immaculate. Like the staff is like clean pressed buttoned downs. Like

somebody ironed their shirts that morning. Like just immaculate. Like everything super well organized. The signage is all like, when was the last time you went into a store and like the signs were perfectly leveled because the the owners did that? Like just amazing. And I've talked to the owners and they're just like this little old couple who was retired and like totally bored with life. So they run a UPS store. And it's like low stress. They get to say hi to everybody in my town. Like, it's just perfect, right? And, like, they're beautiful, beautiful little operators, beautiful little setup. And it's like a huge win of like entrepreneurship on Rails.

And like, I love it. Like, I just, I go in there and I'm like, you guys are doing so great. And they're like, who the hell are you? Like, it's like being a business nerd and you go to like give people high fives for doing a good job. They're like, what? So it's me. Well, it's important to know, too, like everybody thinks franchise and think restaurant. But restaurants or franchises rather can be cricket wireless, like I think Sharon Williams,

UPS store, RotoRuter, like even some of these home services are franchises. Painters, there's a lot of painting franchises. I mean, you name it, it's been franchised, right? Laundromats, I'm an investor in a laundromat franchise called Laundra Lab. So they'll teach you how to open a laundromat and, you know, do it all right and broker your relationship with ElectroLox for the washer's dryers, all that. So, like, if you want to start a business, franchise is not terrible, but just you can't get, you can get ripped off, man, by the franchise brokers, unscrupulous franchisors. You got to pick the right one.

But, you know, by and large, franchising can be okay if you pick your spot. Totally. And for the right person. You know, that's totally it. Me personally, I hate rules. There's no way I could be a franchisee unless there was some insulation where I didn't have to follow a bunch rules that somebody was telling me how to do stuff I thought was stupid. So cool. Well, this is a good one.

I love playing by this sell roulette. Love it. All right. Live Oak Bank, my favorite SBA lenders in the whole country. Thank you to Live Oak. Thank you to Heather as well for being a long-time friend and sponsor the pod. That wraps it up for this week on Acquisitions Enormous. We'll see you guys next time.