Acquisitions Anonymous - #1 for business buying, selling and operating - Scooters Coffee Franchise Investment Analysis $7.5M Deal Breakdown

Episode Date: February 20, 2026

In this episode, the hosts break down a portfolio of eight Scooter’s Coffee franchises in Louisville, KY, debating its $7.5M price tag, real estate mystery, and potential as an operator or add-on play.Business Listing – https://www.bizbuysell.com/business-opportunity/8-scooter-s-coffee-franchises-profitable-turnkey-louisville-ky/2419862/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.Looking to build a professional website in minutes? Try Wix: https://wix.pxf.io/c/6898629/3115214/25616?trafcat=templateHubSpot is the backbone for how businesses scale without chaos. Try them out here: https://go.try-hubspot.com/OeG9Vr💰 Sponsored by:Go High Level – The all-in-one sales and marketing platform built for agencies and entrepreneurs. Automate, manage, and grow your business at https://www.gohighlevel.comCapital Pad – A platform connecting accredited investors with vetted small business acquisition deals. Discover exclusive opportunities at https://capitalpad.comThe team dives into a listing for eight Scooter’s Coffee drive-thru franchises in the Louisville, KY metro, generating $7.5M in revenue and $1.09M in NOI—a 15% margin. Offered either as a bundle or individually, the portfolio boasts high-traffic locations, compact footprints, and turn-key staffing. However, the listing omits critical details on lease terms and real estate ownership.Key Highlights:- $7.5M asking price, $1.09M NOI (~7x multiple)- 8 Scooter’s Coffee franchises in Louisville, KY- No real estate included; possible long-term ground leases- Units average 664 sq. ft. with drive-thru-only formats- Offered individually or as a portfolio—raising questions about quality spreadSubscribe 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]

Welcome to Acquisitions Anonymous. We had a great episode today where we dug in to a portfolio of coffee shops out in Kentucky, of all places. And it was fun because I was in the coffee business for a while. And so we went super deep in it. All four of us were here, including franchise expert, Connor Griss. So stick around in the end. You'll see what we thought about it. It was super fun.

So Acquisition Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100% years anymore. And thumbs downing on just the plus inventory line. Big thanks to High Level for sponsoring this video and helping us pay for our editors. High Level is the all-in-one CRM that handles your emails, text, funnels, and more all-in-one place. Think of it like the Swiss Army knife for small businesses, and you can try it for free for 30 days at gohighlevel.com slash Michael Gurdley. All right, just listeners, dear listeners, you should know that I clicked record because Mills started complimenting how good my video camera looks on my podcast.

setup here. So I want to make sure that I feel like your last camera setup was like a $5,000 setup and this looks like $100,000, like easily. Like it is crisp. If you're not on YouTube, you need to see this. So my fellow, my fellow camera nerd is Bill. And Bill will tell you the entire trick is not the camera. It's the lighting. If you have good lighting, it changes everything. Michael has zoomed out and showed me this room that he's in right now. The whole room is just the setup. Like, the Saskas in the middle of the room. Like, there's this giant, like, there is a 15 by 15 room that is just for this. And it looks amazing on camera. But if you're standing in the door, you're like, what is going on? This is weird. Yeah. It's like a wall

full of lights. But like the shadows in the back look so moody, Michael. Like, it looks very, very well done. Uh, hit or miss? Today's a hit. So thank you very much. But sometimes Michael dials in and he's got like the old school earbuds, like with the wire and like the air. The laptop camera, you could see up his nose. You know, but like today, you look great, Mike. Thank you. Well, in December, my wife was like, why are you working from home so much? I was like, message received.

Message received. Yeah, well, Connor looks good every time, too, though. You're looking great today. Thank you. Bill, your background is fantastic. You look like you're at a palatial estate from like the 1800s. He is at a palatial estate. He didn't bought it.

I moved, Connor. Charlotte just for this office. Oh, okay. Congratulations. Thanks. The office sold him on the house, Connor. How many hundreds of acres it looks like? Yeah. So, Carter, you have a deal.

Get out to the horses. I do have a horse. I do have a horse. If you have a horse deal, you should save it because Heather's not here today. Yeah, Heather's not here. Yeah, so eight Scooters Coffee franchises. Profitable turnkey. Can you share?

Michael just almost hurt his neck. He whipped his head so fast. Let's take a look. Let's do it. All right. So, yep, eight Scooters Coffee franchises. The asking prices, 7.5 million. Gross revenues about 7.5 as well.

They don't disclose EBITDA. Business description, drive-through QSR coffee franchise. This portfolio represents an opportunity to acquire eight established Scooters Coffee drive-thru franchises across the Louisville metropolitan area. Offered individually. Or together, the stores provide flexibility for both single-unit operators and multi-unit investors looking for immediate scale. In 2024, the portfolio produced approximately $7.5 million in net sales and $1.09 million in NOI, reflecting a 15% margin in average store volumes of about 852. Each location is fully staffed, operating with a loyal customer bases and the backing of one of the fastest-growing coffee QSR brands in the country.

With more than 880 units nationwide, Scooters Coffee is built its success on a compact. drive-thru only format designed for speed, convenience, and efficiency. The strength of this offering is reinforced by the broader U.S. coffee market, valued at roughly $70 billion in 2024, and projected to grow at 5 to 7% annually. Nearly 60% of transactions occur through drive-thrus, underscoring customer demand for convenience, a trend that directly supports Scooter's kiosk model. Louisville itself provides a stable foundation with a metropolitan area of 1.4 million, median household incomes of around 71,000, and complete. commuter-driven economy that fuels consistent demand for specialty coffee. Each unit is strategically positioned in high-traffic corridors and established retail trade areas ensuring visibility and steady customer flow. Together, these elements create a compelling

opportunity to participate in a resilient and expanding segment of the quick-service industry, whether through the purchase of a single location or the acquisition of the full portfolio. Louisville, Kentucky, eight operating that confirm, averaging 664 square. feet per unit. Included all of the equipment, all the jazz like that. Yeah, so they mentioned about 7.5 million. They do disclose NOI. I didn't see that initially. But about, yeah, 1.09 million in net operating income, about a 50% margin. It's interesting that they're offering them both individually and as a collective. We can talk about that. Owner will provide four to six weeks of, or franchise war will provide four to six weeks of comprehensive training.

That's the gist. Go all the way back down really quick, Connor. Was there something about like a fee? If you go all the way down, like the fee is waived. Let's see. Yeah, franchise transfer includes the waived fee if signed before 2025. So sometimes if you transfer a franchise, they will, there will be a transfer fee that the franchisor charges. Usually it's relatively low.

It's kind of a, you know, 10 grand-ish to cover just the franchisors legal cost. But that's what they're saying here is that they'll, yeah, they'll waive that if done by the end of 2025. Unfortunately, we didn't get it done. So we'd have to pay the fee. And I guess that draws to my attention, the fact that they gave us 2024 numbers, not 2025, on the revenue in NOI. Yeah. Yeah, that's really interesting. I'd wonder what, you guys know what the coffee market has done in the last couple of years.

I don't, Michael, how long have you been out at the coffee business? Well, Michael, reset for people if they aren't familiar with your background in the coffee. Oh, I started a direct competitor

of business to this in 2020, and we sold it late 2022. And the reason we sold it. How many locations do you get to? We had three established and a fourth under development, and we sold us some guys who owned the local chain here.

Is it still operating? Yeah. Yeah, they are still running it and yeah, it's still operating. The reason we got out, and it may be what's going on in this market too, the reason we got out is during the SPAC era, there was so much money that came into the space. And we saw them just deploying capital like crazy between Dutch brothers. We saw Seven Brew coming into town. And basically, like, they were just going in and outbidding everybody else because they had total cheap access to capital. And we saw that coming.

We're like, we should pick a different game to play than the. one. So I guess my question about this deal, by the way, Connor, is what is the real estate situation? Like they don't even talk about it. Are these leased? Are these long-term ground leases? Do they own the land? Does the land come with it? How is that all going to work? Because ultimately, like, that is the biggest determiner of, of like, is there a financiable value here? Is like, what are the hard assets. And I worry that these are long-term ground leases where they've put up the money for the buildings and they're paying monthly rent to a landlord, which is not ideal. Yeah. What caught my eye was the footprint is extremely low. Was that the case with yours,

or was it bigger? Yeah. I mean, is it six, okay, that's a, yeah, that's a small. And all of them are that size, right? They don't have full kitchens. And so you're basically just a couple of espresso of machines and a couple drive-thrus and a bunch of point-to-sale machines. So how does a long-term ground lease work and why is that, you know, not ideal? Well, thank you for asking. I will now mansplain you that. The good news is, yeah, because we're all bros, I can mansplained. Bro-splain me, Michael.

Bros play you. Yeah, I think I've told the story before when a man is mansplaining, it's mansplaining. But when you're just hanging out with your buddies, it's just talking about. Thanks. Because we don't talk about our family. Exactly. So the long-term ground lease means that you have signed a lease, say, 20, 25, 30 years or sometimes shorter or longer.

And you have built a building on top of somebody else's property and you are paying rent to have that building on top of it. And that can mean that that can go as far as you on the building. They pay for taxes, insurance. One more common is what's called a triple net lease where you build the building and you just pay the landlord every month and all the expenses and everything else are on you. And banks, banks and financing people tend to not like that as much because it doesn't give them as secure of credit to, to go after, right, or collateral. So they would prefer it if you own the land

and you own the building, but they, uh, they will also take it if you just own the building. So that's why I asked like, okay, well, you're charging eight times earnings here almost. Like, what else do I get? Do I get the real estate or am I just getting buildings? Because the downside of the building problem is these long-term ground leases end at some point, right? They're going to end 20 or 30 years from now, and then I have a problem. And the landlord, the problem is the landlord's going to raise the rent on me. Yeah, and what happens when that expires? Because, like, the landlord has you completely buy the you-know-what, right?

And that's the point is, like, they can charge you whatever or you have to knock your building down. Is that right? It depends on what the lease says. Sometimes the lease says the landlord gets the building at the end of the lease because a typical building or depreciates over 39 years or whatever it is. That building may be functionally obsolete and you're happy for the landlord to take your problem from you at the end of lease. There's also situations where it's left totally unknown. It's just like, okay, well, we'll figure it out 30 years from now. Who knows we may be dead by then.

Then the last way will sometimes happen is like somewhere in the middle. Like people will get like a right of first refusal to lease the property again. Or there's some sort, you go to some sort of function where there's like a market value placed on what the lease should be and cost and all that kind of stuff. So it all just depends on what you negotiate with the landlord, but it can be anything. There's this dynamic too that's happened with all these dollar generals where dollar general is not in the real estate game. They're in the operating business game, but they have created this incredible, beautiful package with a bow on it for 1031. investors where you do a tax deferral and you don't pay tax if you do a light kind of change, you know, selling a building and buying another within a certain very set amount of parameters.

But what ends up happening is people sign these 15 year leases with Dollar General and the buildings are built so cheaply that by the end of the 15 years, Dollar General's like, well, we've redesigned. So we're going to go across the street and put up a new one because that old building is basically just a tin can that like we don't care about. The drive-thru coffee is a little bit different because they're a relatively small amount of real estate and access is the big thing. Size of the lot, drive-through length. I had a piece of property that a drive-thru coffee wanted to do a ground lease on, and it was competing between two different lots. One lot was too small because this one specific brand had like a 12 to 15 car minimum in the drive-thru.

Like it couldn't be in the street. It had to be at least 12 to 15 in the drive-thru on the property. And we kind of won out versus somebody else to. It just had a smaller lot, like a block away. Yeah. That's the, I call it the Chick-fil-A syndrome, which is a lot of times very professional landlords

will turn down a Chick-fil-A or a Dutch brothers because they don't want to have 30 cars stacked in their lot 24-7 taking up all the other spots. And that definitely happens with some of these. Scooters is not Dutch Brothers, obviously, but it is what it is. So, Bill, I have to imagine with this, you know, we're taking the average of eight locations, I would be surprised if all locations perform equally well. I bet there's some stars in this portfolio and I bet there's some dogs. So at an average of 852K is a unit based on your judgment that does 852K of revenue making money?

Yeah. Yeah, you can make money at that. So a typical, if you look at public filings, like a typical Dutch brothers is pushing. high ones are twos, or low twos in terms of average revenue per spot. I haven't looked at Seven brew. Your independence shops or your off-brand shops like these scooters, like it is totally normal to do $600,000 to $1.5 million, depending on location. And again, this is fundamentally coffee only. There is not a, there's not a food component. Is that right, Michael? Scooters is a unique one where they do like, they warns. you up these pre-prepared meals.

But by and large, Dutch brothers in seven brews don't do food. Okay. So that being said, though, they did say that these businesses are, or the locations are offered separately or together. So if you get in here and this is a portfolio and there's like two or three dogs, you just go, I don't want those. And you just buy the good ones. Seems like very desperate to me.

Usually it's like all or nothing, you know? Yeah. Like who's going to, if you're the franchisee, and you own eight. Let's just assume they only own eight. They don't own 12 and they're keeping the four best, which would be a really bad sign. What are you going to do? I've dealt with and had friends who are franchisees who are selling off, you know, parts of their portfolio. And they've had, like, you don't want to hold onto the dogs. What are you going to do with it at that point? It's probably bleeding cash. So it isn't all or nothing if you have any strength as a seller. It's all or nothing.

Yeah. And the question would be, like, if they're, willing to break them apart already, why would they not break it apart at the onset? Because then you get rid of the dogs, if there are any that have negative cash flow, your combined number of the good ones is going to have more positive cash flow without the dogs taken into account. So it's like just write those off and sell the good ones if they're willing to break it apart. I don't know what the, you know, the terms of their franchise agreement is, but that is a factor too, because if they have, If they're all one collective thing that if you shut one down, it throws the rest of the terms into question, that's a factor too. But if that is on the table, which it sounds like it is, I don't know why they wouldn't go ahead and carve those losers out.

Bill, why is this on loop net? Well, it's on loop net because they probably, the Slava firs, the guy that's representing is probably a real estate broker. And he probably doesn't know about bizby sell. It's on biz by cell. It's on biz by cell. It's probably also on. loop net because they're both owned by co-star, right? Michael? Yeah. Yeah. So a lot of times you seem syndicated. I have occasionally seen really good businesses for sale on loop net that somehow don't make it to biz by sell, just broker incompetence, which is a leading indicator of all kinds of

other broker incompetence that can be both maddening but also an indicator that you're probably going to get a good deal. What do you guys make of the fact that they report their earnings in net operating income, which is largely a real estate net income? metric. May reinforce Bill's thesis that the broker is a real estate broker. I think part of this, y'all, is that if you have eight stores, you probably have some type of middle management, right? There's probably like a division manager who's overseeing the managers of these other

stores. I'd be willing to bet that net operating income doesn't take that into account. And there's some kind of parent org expenses that aren't. being reflected in that million bucks. So that's a four wall number and then there's all this, you know, yeah. Yeah, over that, that definitely could be the case. So there is definitely, to your point, Mills, there's an economies of scale problem with this. Like, you kind of want to have seven or eight stores because then you can hire like a real general manager if you're a semi-active owner.

Otherwise, if you have three stores, you're the part-time general manager because it's impossible to afford like a full-time GM for an area. So I do like that. Location 2 runs out of Cubs. You're the one driving back and forth between them. If you have eight locations, I guarantee at least one day a week, probably five days a week. Somebody doesn't show up when you're supposed to be opening up the store. Because remember, you're paying the people that open up these stores. You're paying them 12 bucks an hour. And then they make a lot of money on tips. And you're expecting to be there at 5 a.m. on a Tuesday every week. And like that, If you have eight stores, I guarantee at least several days a week, that person doesn't show up. Hey, everyone, it's Bill. And I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called CapitalPad.

And it is the thing that I wish existed when I started my journey of operating and investing in small businesses. So CapitalPad is a marketplace for acquisition entrepreneurs that is people who want to buy a business and need capital to list their deals and solicit capital from other people who want to invest in acquisition deals. So if you want to back somebody buying a small business, CapitalPad is a place to do it. And if you want to buy a business and need capital, you can go on CapitalPad to be introduced to investors. So the really great thing, too, from the investor side is that CapitalPad takes care of all of the details that can get hairy with small business acquisitions. They handle standardized terms, standardized governance, standardized distributions all up front in black and white. Basically, CapitalPad professionalizes

investing in small businesses. And the returns can be really, really good. I'm so stoked that they exist. It's founded by my friend Travis, who is a phenomenal entrepreneur in his own right. So if this sounds like something that is appealing to you, if you want to buy a small business and need capital, or if you want to invest in small businesses, go check out Capitalpad.com and tell them that Acquisitions Anonymous sent you. And how many employees do you think are opening the store or that are there at any given time, Michael? Depends on how busy the store is, but a scooters might have two if it's a slow one. If it's a busy, like Dutch brothers, you might have five or six.

Yeah, because that's like, that's the other side of something that's really lean from a labor perspective is that when one person doesn't show up, it's 50% of the workforce is out. You know, so that's definitely a factor. The beauty of this business is you're selling a stimulant to people that doesn't go bad in your refrigerator. You have very little food loss on like a restaurant and all that kind of stuff. People are addicted to it. I'm raising my hand because that's me. And like if I don't have coffee, I will get a headache.

And I have other problems too, but that's my biggest one. We all have our voices. Yeah. And they drive up to you and they want it every day. It's a consumable. and you sell it at anywhere from 50 to 80% gross margin. And it's got a lot going for it. And that's why you see so many coffee places open up.

And it's actually in the hospitality world, it is the lowest failure rate hospitality concept is selling coffee. Interesting. Yeah. Because the Tam is giant. Do you know what the lowest failure rate small businesses is? What? Pet supplements.

No, I'm kidding. Sorry, two six. It's two back or something or plumbing or something. everybody needs. Dentists. Dentists. Yeah. Everybody's got teeth. My guess was casinos, but way off. Well, I mean, this is location is everything, right? I mean, I think you've got to underwrite each one of these separately and the leases on each one and say, do I really want to

be here for the next 20 years or however long the lease is before you decide if you want to buy it? Yeah. And it just probably have escalation. in the least too. Yeah, and given that it was established in 2021, I bet there's a pretty long tail on those, and that was one thing I wanted to mention, too, is if they've actually gotten, I mean, that's five years. So if they've gotten eight open in five years,

they've done a lot of groundwork that, you know, if you got it for the right price, would be nice, given that they've laid a lot of that foundation. But, I mean, the multiple to me sounds crazy. What do you all think? Yeah, I agree. If there's real estate included, I'm interested.

If there's no real estate included, I'm not really interested. Funny tidbit for you guys. I've made more money being a landlord for coffee shops than I ever made owning the coffee shops. Like that's much more fun. I will say we've roofed several of these and they are incredibly expensive. I mean, they're small. So price per square foot, you kind of throw out the window. but they are so expensive to build.

Why? What's so expensive? I thought the whole point would be that they were cheap to build. You could slap them up. You don't need a lot of real estate. I don't get it. I think the way seven brew does it, they're modular.

They like bring the whole thing in on trucks. So that seems like it would be cheap. I don't understand. Well, scooters, scooters specifically. Yeah, just have a little bit of knowledge of them. And their development in an area that I'm familiar with,

they slowed their role out of additional stores because they, ended up being so expensive to build. I would be willing to bet they're selling these for about the cost of what it cost them to build them. Well, like scooters, I just look, they share in their FD. It's like they share $692 to $1.5 million for the total investment per unit. So it's a wide range, but I think you're right. You take the, if the middle of that is a million times eight, that's right at what they're selling.

So they're just trying to get their money back. I bet they've realized this is a huge semi-passive pain in the ass. So fun fact for you guys. Fun fact for you guys. That's my new favorite phrase for a small list. So fun fact for you guys, if you go into like a Starbucks and you see that giant like La Morosco like espresso machine that everybody has to have the Italian one, how much you think those cost? $25,000.

No. You're supposed to say a low number. Mills. Oh, sorry. When I say a high number, $300. No, three to $4,000. I don't know. No, they're like, they're like Audi level costs. They're like $35 to $50,000. I'm sure. That's crazy. Yeah, to make a little espresso and every nerd, espresso nerd has to have one because that's, so you can't get Chinese versions of them and knockoffs of them that are a third the price. And that's what we ended up doing. But yeah, if you go in and look at somebody's places, what they spend just,

on that piece of equipment. We're not talking about all the others. Then there's a grinder. You have to buy a professional grinder. It's not like the one you use in your kitchen. And then all the different fridges and air conditioning because these rooms get really hot. Like there was a lot of expense that goes in and it's really expensive. I mean, it's not cheap.

Starbucks has largely shifted. I do think that the facts that they stay here about 60% I think of, of, you know, coffee consumption goes to the drive-through. Starbucks, and we've talked about it some on the podcast before and like they're, you know, loyalty program and the fact that they keep all this cash on their balance sheet that you auto deposit on your Starbucks gold card or whatever. But they have systematically been shutting down stores that don't have drive-thrus. There's one in Columbia, South Carolina. The first one in South Carolina was here for like 20 years, did not have a drive-through, had incredible business, but they shut it down in favor of redeploying stores into drive-through. And it's incredible to watch

the way that those have, they were early compared to, you know, a lot of these. But now it's just a land grab. I mean, it's, it's a gold rush for who can get the corners for these brands. Yeah. And so here's, here's the other secret about this business that people don't realize. There is a huge kind of power law distribution and a commoditization of what's going on. If you go to Seven Brew, Dutch Brothers, scooters, any of these guys, they all buy their syrups. They all buy their chocolates. They all buy the coffee. they get the milk, it's all commoditized. They all are buying the exact same stuff. Go look at the syrups. It's the same crappy syrup that comes out of some Italian brand that just tastes terrible. And that's the fundamental problem with this business that I realized was, unlike McDonald's and Burger King or Chipotle and other food concepts that have a differentiated offering, there is fundamentally no differentiated offering other than who has the cheapest cost of capital and who has the best locations. And then when you go double-click on these locations, they sell their top two or three sellers are the same exact recipe. It's a chocolate, caramel, double-expresso, iced caprappuccino.

They all sell that number one. It just has a slightly different name at every single one. And if you go into every single one of them, they sell exactly the same thing. It was our number one seller. It was Dutch Brothers number one seller. And it was the number one seller for seven brew. And you could tell because you just go ask the, I would figure this out because I just drove through them. and I asked the baristas to give me their number one

and number two bestselling drinks so I could test them. And when they did this one afternoon, I realized everybody's selling the same crap. Like, it's just, there's no differentiation whatsoever. Well, so what's left, Michael, right? There's brand, which if you're a startup, like, that's tough to compete with Dutch brothers, et cetera. So brand is going to be one of the few modes here.

Price. You know, I don't want to compete on low price. And I think the biggest one, location, location, location. Right? So that's all this left, right? What else? So I'll give you a fourth one.

There is experience as well, right? And so Dutch Brothers gives a great job of making it cool to go to their locations. There is a new coffee chain that's come to the U.S. out of China called Luckin' Coffee. Have you guys heard of these guys? Yeah, I have, but I don't know much about it. Yeah. So what's interesting about them is they have taken and basically, I would call it, supremized the coffee buying experience, which they've, young kids like macho, which is very different than us old drinking, drinking espresso

and that sort of thing. But the second thing they've done is they have totally made the buying of coffee at Luckin, like a digitized, gamified experience. So you have all these points going on. You have all these time-based things. Like each day it's chatting with you. Like, hey, like, we're going to do this special thing for this matcha drink on this time. We're going to do this drop of this thing, kind of like Crumble does. So that is another way people have figured out how to compete is like how do we create an experience that's tailored for our audience. And Luckin is supposedly doing incredibly well based on the numbers I've seen. That's cool. How much in the coffee business, how much opportunity is there for variety to be a leg up? Like you just mentioned crumble, how they do different

drops. Because when I think, like, I consume black coffee, so I'm not the person to, you know, talk about this. But like, I just feel like coffee is something that people have a routine and they like to go and have the same thing over and over and over. Am I, am I off the mark? I think it's a complex answer based on who the target demographic is and stuff like that. Anybody on this podcast as a host is not going to care about gamified coffee buying, like, give me a break. And I don't, and I'm not interested in macha, my kids are. And so I think there's opportunities depending on who you're targeting. This scooters and Dutch brothers and Seven Brew, like in Starbucks, like, for me, the space going after the 45-year-old coffee drinker who's willing to drop seven bucks on a Frappuccino, like, I think

that's an incredibly crowded market. Yeah, I think that's a super crowded market. You're also seeing folks like QuickTrip and guys like that getting much better at coffee. Quick Trip coffee is better than Starbucks coffee. That's how that's a crazy fact these days. So I think, you know, I think that's getting incredibly crowded. You'd have to pick a niche that's unique. Yeah, yeah.

There's that soda one recently. I know we're tight on time we're going to wrap, but what's the soda one, Michael, that we've talked about that it's like extra shirt. agree soda and stuff. There's a bunch of them. Well, they all come out of Utah, right? Because LDS folks, Mormons typically don't, you know, they don't drink. Tented, tinted beverages is what they say. So they can drink, they will drink energy drinks, but they won't drink tea or coffee to get caffeine. And so they've replaced that by just selling these like special dirty sodas or what they call. Yeah, yeah. It's interesting. I watched a concept here that started up and was like a homegrown kind of

concept in a pretty marginal location of former Sonic for those dirty sodas, and it failed massively. They never had any customers whatsoever. It closed down and then, you know, it's San Antonio. Like, we like sugar. Like we like sugar and taco. Like, we're not obese for, because for no reason around here. And so, so then it closed down and then like a successful franchise concept doing the exact same thing, open backed up and whatever in that same location. And so whatever they did, between the mom and pop one and the franchise location changed everything. And they're absolutely packed now. And I see four or five cars there all the time,

which to Bill's point, I think, was a testament to the power of brand, the power of getting to scale and understanding kind of what your customers really want. Something they did differently changed everything. I feel like that's got to be one of those categories that goes viral on TikTok. Like the slime or like some recipe for like three flavors together makes it taste like a samor. or something, some trendy thing, and then people want it. That's how I do marketing for that. Like, I'd be doing TikToks with silly recipes that taste like things, and you got to come in

and try it. Yeah. The customer base is teenagers in 20-somethings who think sugary sweet is delightful like my kids. It's nasty. So, Connor, if this is a crowded space in the franchise ecosystem, what's not crowded right now? Well, I mean, food is not my lane of expertise in general, so I can't speak to that. But I mean, look, there are a lot of lanes that are crowded, but I think that there's still opportunity. I think that there's still opportunity in service businesses, whether it's home or commercial.

I think there's still opportunity in senior care, another lane that's very crowded. I mean, the tradeoff is I got into a franchise and smashed my trash where I have to have 30 or 40% market share in trash compaction to make that work, which is a lot. Whereas, you know, some of those, you only need a fraction of a fraction of a trash. percent to build, you know, a huge and successful business. So, I mean, I think that's just the tradeoff that we all encounter. But, you know, and so there are unique things that are not crowded, you know, certain lanes of fitness and wellness and pet care and youth enrichment and those kinds of things. But, you know, you just have to weigh the fact that it's not crowded with the fact that it's a lot more nascent and just a lot less proven and just determine what best fits your

your risk reward profile and how you think about it. which is a great, a great reason to have a guide, honestly, to have somebody who can say, hey, here's the, here's the landscape, and these are the things I'm hearing you say, and here's what it seems like would suit your personality. I agree. So what are you all, anybody interested in this thing? If I own eight other Scooters Coffee locations in another place in Tennessee, definitely. Yeah.

I mean, incredible add-on for an existing Scooters franchisee, for sure. assuming, you know, you can drop the one or two dogs locations. I'm certainly not paying this price to cannonball into scooters. At half price, is it bad? Not necessarily. I mean, if the demographics of the area are good and the locations are good and, you know, the leases are good and you've got long enough left on the lease, I mean, I don't hate it.

Probably not of this price, but I don't hate it. I'm probably excited at like four to four and a half times NOI, not at eight times NOI or wherever they are, seven to half times in OI. I mean, asking prices are made up. So, you know, and that's the thing people don't understand about buying businesses is like, this, sure, I would love to get a zillion dollars for my business, but you can bid whatever you want, you know, the market will tell them what it's worth.

And I know we've talked about this before, but this is probably a half court shot that they went around to the other franchisees heard what they were willing to pay. This is their half court heave to see if, if anybody's like actually. wrenched in paying that. And then they go back to the franchisee and say, yes, I'm going to sell it's something reasonable. We thought like waiting for a Gurdley. Yeah. So I'd agree with Bill's sake, though. It's like it's interesting, but not as a, like, hey, let me dip my toe into the coffee industry, you know, for the first time. But, you know, it's something that people are interested in. So, I mean, if you pay four times NOI,

you're probably buying in at less than it costs to build these things, which gives you. you have structural cost advantage. You know, I don't hate it. You just can't, I just don't think you'd pay this price. Because they paid this price and they don't want to own it anymore. They paid this price to build them probably based on what you looked up in the FD, right, Connor? That's right.

The NOI return on $8 million of capital is not doing it for that. So you need a different basis. That's right. And that comes back to the point about the half-court heave when they go back to franchisees is that that's what they went to franchisees saying, is I want to get my money back. They probably looked at the cash flow and said it's not worth that as a multiple.

So this is their attempt to do that, but we'll see if they do. Yeah. All right, everybody, thanks for being here today. Good discussion. Sorry if I dominated it, because I could tell we went for 33 minutes, but I am passionate about the coffee space.

I've learned a lot about it and why it's fun and not fun. So if you enjoy this episode, please share it with one of your friends. That's how we grow the podcasts, and we'd love to see you next week. Thanks.