Acquisitions Anonymous - #1 for business buying, selling and operating - Would You Pay $1.3M for a “Med Spa” for Dogs?

Episode Date: September 15, 2026

In this episode the hosts talk about a $1.3 million multi-unit dog wellness franchise in Southwest Florida—and debate whether its fast-growing membership model is a great early-stage acquisition or a dangerously overpriced bet on future cash flow.Business Listing – https://go.franzy.com/resale/pet-3-unit-southeat-01Welcome 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/OeG9VrSubscribe for more episodes: https://www.youtube.com/@AcquisitionsAnonymousPodcast?sub_confirmation=1Subscribe to our Newsletter: https://www.acquanon.com/newsletterThis week, the episode breaks down a membership-driven dog wellness franchise in Southwest Florida. The portfolio includes two operating studios, rights to open a third location, and 1,124 active members, with an asking price of $1.3 million. Customers pay recurring monthly memberships for services like bathing, nail trimming, teeth cleaning, and even dog blowouts.The financials make this deal especially tricky. Combined 2025 revenue was roughly $800K, but the business lost around $95K. Through June 2026, revenue had already reached approximately $600K with nearly $100K of positive net income, putting the portfolio on a dramatically different trajectory. The problem: the seller appears to be asking buyers to pay today for growth that hasn’t fully materialized yet.The hosts dig into membership churn, unit economics, franchise maturity, SBA eligibility, seller motivation, and whether an experienced multi-unit operator could unlock significant upside. Heather also explains why the lack of historical cash flow makes traditional SBA financing difficult—and why a slower closing process, seller financing, or an earnout tied to future performance could make this deal far more attractive.Sponsors:Inzo Technologies — When you acquire a business, you inherit its accumulated IT and cybersecurity problems too. Inzo helps acquisition entrepreneurs evaluate technology risk during due diligence and manage cybersecurity, IT, and voice after closing, including a complimentary IT risk audit of your target company. Learn more at https//:www.inzotechnologies.com/etaMercury — Thanks to Mercury for partnering with me! Mercury gives founders powerful banking, cards, and financial tools built to help businesses operate smarter. Learn more and get started at http://mercury.com/Acquisition Lab, the leading community, platform, and fund backing serious acquisition entrepreneurs. The education and deal-search tools are free, and a real board of advisors will talk you out of a bad deal as fast as into a good one. There's no clock and no pressure. See what it's like: sit in on a free live roundtable at https://www.acquisitionlab.com/roundtables, and mention Acquisitions Anonymous!Key Highlights:- $1.3M asking price: Two Southwest Florida dog wellness studios, 1,124 active members, plus development rights for a third location.- Rapid financial turnaround: Approximately $800K combined 2025 revenue with a ~$95K loss versus roughly $600K revenue and nearly $100K net income through June 2026.- Recurring-revenue model: Members pay roughly $35–$55+ per month for routine dog wellness and grooming services, with opportunities to upsell additional services.- SBA financing challenge: Heather says there isn't enough historical cash flow to finance the deal as presented, potentially making seller financing or another creative structure essential.- Big upside—or a falling knife: The hosts debate whether a skilled multi-unit operator could grow each location toward system-average membership or discover that the seller is exiting before deeper problems emerge.Subscribe to  weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking hereDo 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 back, everybody, to another episode of Acquisitions Anonymous. I'm Mills Snell, one of your co-hosts, me and Heather from Vizzo Capital or joined today from Alex, from Franzy. Alex always brings an amazing deal. He brought a deal so good. We had to boot one of our co-host before the recording started. But we talk about a really, really interesting multi-unit pet franchise. It's pet wellness. Think dog washing, grooming, nail clipping, even blowouts for dogs.

It's an established franchise, but it's early on. It's in a growth trajectory, kind of wanting to be compensated for the growth that they have that is coming up. But we talk about the unit-specific dynamics here, franchisee, franchisor relationships. We talk about SBA eligibility for something like this, cover kind of all the bases and get pretty deep into the weeds on this one. Hope you enjoy. Stick around after a quick word from our sponsor. Hello, another episode of Acquisitions Anonymous. We don't have 100% beers anymore. And thumbs downing on just the plus inventory line.

When you close the deal, you inherit the cyber and IT problems that have been piling up for years. Enzo Technologies, that's INZO, helps acquisition entrepreneurs evaluate technology risks during due diligence and manage cybersecurity, IT, and voice after close. CEO Nick Acres acquired Inzo and recently. led the company through its first add-on acquisition. He brings a buyer-operator's perspective to what needs to be uncovered before the wire and stabilized once ownership changes hands. Enzo offers a complementary IT risk audit of your target company to help surface the biggest risks in plain English and deliver a 30-day plan to reduce exposure and lower the risk of downtime.

Visit Enzo Technologies.com slash ETA and mention acquisitions anonymous. That's I-N-Z-E-E-E-E-E-E. technologies.com slash ETA. Welcome back, everybody, to another episode of Acquisitions Anonymous. Alex, Heather, how's it going? Fantastic. Tuesday. It's better than Monday, Heather. It's true.

And coming back from a vacation. So Monday after vacation was probably a real Monday. That was tough. That was very tough. But I am settled in now and all the tension is back in my muscles. So we're ready to go. It was weird. It was like the SBA did not plan their announcement schedule around your vacation schedule. So was it tough to be off last week with the- It was very tough. Yeah, the SBA SOP changes dropped on a Friday before I started vacation.

So the week of vacation was a little bit crazy. So it was getting back. It's still a little crazy because everyone's still trying to interpret it all. But lots of big changes and, you know, little by little everyone's sort of finding what it says. digesting it. Yeah. And then everybody goes to find that line that they can flirt with with the SBA. How much is too much? Let me put my tone line. Yeah.

We have Alex from Franzy, who's our resident franchise expert. And Alex, you always get the host of the day, the guest of the day award because you always bring a deal. And it was such a good deal that one of our other co-hosts who will go unnamed had to recuse himself. So thank you always for bringing an amazing deal with great context and for booting one of our co-hosts in the process. We didn't want to hear you. I'm going to pull this up.

Yeah, yeah. And this is on Franzy's platform. So if you're on YouTube, you can look along, follow along with us here. Alex, do you want to read this one and take us through it since you're more familiar? Yeah, let me walk you through it. So it is a membership-driven. dog wellness portfolio in southwest florida so they've got two studios live and the rights to a third so there's a little bit of you know opportunity to get a third one open they are asking for

1.3 million purchase price and they currently have 1,124 active members so it is again it's a recurring revenue business but for pet wellness and when i first saw this i was like what is pet wellness what does that mean. So it's kind of like packages where you get a set number of services a month for routine, yeah, grooming, bathing, teeth, nails, you name it, kind of the whole grooming services, but their whole call out is not every dog needs all of those four or five things every time. Some dogs, you know, maybe very rarely need those things. And so they give you this kind of like base layer membership and you can add things on as you as you want. So note that, right, is that the delineation in this space is like,

If there's a vet involved or not. It's basically a spa for dogs. It's a net spa for dogs, which I am laughing. Heather already likes med spas. I do. I do. And I have a dog. So I feel like my dog should be going to one of these places.

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Choice Financial Group and column NA members FDIC. I saw this funny joke where it was, you know, the younger generations are having, you know, pets instead of kids. And I'm like, well, what are pets now to, you know, to this generation? Like, oh, plants, they're getting plants instead of pets. And they're like, well, what are people, what about people that actually have kids? And they're like, that's like buying an exotic animal now. Like you have to have a lot of money or a lot of time to be able to do it.

Wow. Yeah, you're so privileged. You have a child. So that you're seeing a lot of this kind of stuff pop up like, you know, pet daycares and hotels and pet spas, I guess. So this is, you know, this is one of those. Again, like two are already open, two are already cash flowing. The first location did just under a million in revenue. first year and profited a pretty small or abysmal, you know, $3,500, but that's because it was

the first year, lots of fixed costs and getting open. And then in its second year through June, it did $290,000 in revenue, but $68,000 in profits. So it's starting to grow and margins are starting to normalize now that the first year is behind them. And then the second location, let's call it location B. They did $375,000 their first year, but lost $9,000. $37,000. And in their second year through June, it's done $310,000, but $33,000 in profit. So these are very new. I mean, less than, you said the oldest one, the oldest one is 24 months in? Yep. Okay. Very new. That's probably one of my first kind of diligence questions that I don't have an answer for, but why is the owner, you know, it's starting to turn a corner, is starting to do well. I mean, June, if it stays on pace,

will have 140K in profit in its second year. And location B will have just under 100K. So across the two, three to 350 in profit with the rights to open a third and plenty of upside for membership growth. So yeah, it says here, like they're selling because of a change in the owner's personal circumstances, they had the plan kind of moving to open the third,

and they're going to pass that along to the buyer. That may or may not include like site selection already worked out or something like that. We don't know. I doubt it. I mean, they might have done some preliminary work, but typically franchises, you're on a development schedule within franchising. So if you buy the rights to five, you're required to open those five over a three-year period or a four-year period. That can be negotiated with the brand. So that would be interesting to figure out, does that transfer?

or does the brand give you flexibility when you buy into this to get 12 months of your bearings and then the clock starts and you've got 12 months to open the third or what does that look like? This is kind of cool. You guys have this like buy versus build. Yeah. Graphic here on Fransy, like starting it from scratch versus acquiring this portfolio. Is this something y'all do by default in these kind of scenarios? Yeah. So for resales, we do this every time.

it's a de novo opportunity where you're buying the territories. We typically don't do it until a candidate or a client is further along in the process. Just because each brand is different and each state and each city is different and we try to be as accurate as we can on what's the local construction cost and are there tap fees if you've got a car wash or a laundromat where you've got to pay extra for water in certain municipalities. So we try to get very detailed and specific depending on what brand and what geography they're building in. And then this is kind of a helpful financial summary. So you've got it kind of combined.

This is combined with both. Is that right? And then broken out location A, location B. Yep. Yep. Okay, those numbers kind of make sense. So we've got, and I think you read some of this, but combined full year 2025 was about 800,000 in Revenue.

So far this year through June, they were at 600,000. So run rate is definitely, you know, increasing and growing. They have positive year-to-date net income at both studios in 2026. And then the breakout here, it looks like it's interesting. These two locations kind of tell different stories. So location A has a higher revenue per member. but it looks like 25. Location B is is the more recent one.

So the trajectory is different between 25 and year to date, 26. Interesting. So the way this works is I'm a pet owner. I maybe have one or multiple dogs. And is it dogs only or dogs and cats? Dogs only. And I'm signing up for a recurring membership. Because I think, you know, these active members are, you know, kind of always churning in some way, shape, or form.

But I'm signing up for a flat dollar amount, and that gets me in the door. But you're saying part of this franchise's value is you maybe don't need a cut and a wash and a nail trim and whatever other things at all times. So this is a price to get in the door and then maybe a reduced price per service. Is it that type of model? Yeah, so it depends on the market. It's 35 to, I think 60 was the highest I saw in like tier one markets for the base membership, which gets you, I think you get to pick from five services, you know, three or four a month, basically. And so you're getting in and you're getting a nail clipping, teeth brushing.

They offer blowouts, believe it or not. We don't know. We'll get blowout. So you get to pick three of those kind of basic services. and then you can add on, like, they had deeper, like, what's it called, like the plaque buildup on a dog's teeth. Like, they'll actually use tools to scrape more of that kind of built-up plaque off. And so more like specialty services you can add on for an additional cost. But the base membership is $35 to $55 a month.

Okay. All right, got you. And are there, like, family discounts for this kind of thing? Like, you know, I have three dogs and I want all three of them or their price breaks for volume per household kind of thing. I didn't see that anywhere. I know as you had tiers of the membership. So there was like the essentials, which gets you, you know, four or five services and that seven or eight, nine or ten. But the higher up the tier, the bigger discounts they'd give you on the add-on services. So if you had the basic tier, you'd get 25% off other services, 40% off, 50% off, etc. What's the gross margin profile like on services like this? Because you're layering on a monthly component, it kind of obfuscates the data a little bit, I would think.

But like, if you're doing this, you should be operating at like 75% gross margin or something like that. Yeah, I think I look at it similarly to other membership-based gyms where a lot of your cost is in the fixed cost of getting a location built out. and then almost like, again, a gym membership, we have to pay a trainer. You've got to pay a groomer here or someone to cut the nails,

brush the teeth, et cetera. I imagine the skill set and cost point of an employee here is maybe the same or even a little bit less than or easier to find than potentially a fitness coach or trainer. So, yeah, I imagine gross margins are north of 50% probably in that 70% range. I would think that there's like,

still compliance and like regulatory component, but Heather, you've got a ton of experience with med spas. It seems like on the pet side, maybe it would be a little bit less because you're not dealing with people. I think this is just like a, like in a human med spa where they're not doing injections, you know, there really is no, the regulations are really not there because you're basically doing cosmetic procedures. I think this is pretty close to that because the closest thing I heard to medical was more dental here. It didn't sound like there was a, anything that you necessarily need a license to do. It's more like really high-end pet or thorough pet grooming that you're sort of locked in

with a membership prepaid. And so they're capturing that these are our customers and they keep coming back because they're on this regular payment schedule. I think it's a really smart business model. And I don't think it probably has any regulatory burdens. It doesn't sound like they do any boarding of jobs. dogs. It's just literally come in and pick your dog back up after the service. So no, this sounds like it would be fairly easy to run, to be honest. And certainly something that appears to be

SBA eligible. Of course, with franchises, the first thing any SBA bank is going to want to do is look up this franchisor and see if they are on the SBA approved list. The SBA approved franchisor list went away for a while. The SBA got rid of it. And then last year in June, they brought it back. And it was a little chaotic because there were a lot of brands who didn't even know they needed to be on it and had to get like hurry up and get all their documentation submitted. And there's this one guy that works at SBA has been there forever, a lawyer who reviews all the franchise documents for eligible. That's crazy. Fun fact.

Wow, I did not know that. I'm glad you shared that I didn't even know that. Yeah, I won't say his name, but I know his name and he's been around forever and everything goes through him. I don't probably got a cell phone. I probably do. He used to be based in Los Angeles. I don't know if he still is. But yeah, it's interesting. They brought it back, but now you can look it up. So you could Google, if anybody's looking at a franchise concept, you could just Google SBA franchise registry and you'll find it and see whether the concept that you are looking at, That's the first thing lenders will do is say, is this concept already SBA approved, which is a fairly easy thing to get because it's all they're looking for there is do the franchise or give the franchisee independence enough so that they're kind of running a business. Yeah, that's kind of it for the first pass. The second thing is there's a lot of data on all the loans that have been made to franchise businesses. And so the next thing banks will look at is what is this franchise concepts,

track record with the loan defaults. Do they have a high level of defaults? And sometimes that's enough to just turn off all the banks. This concept's got too many defaults. We're not lending. So those are the two things banks will look at first. This seems like it's got to be a brand new concept, though, I would assume. Yeah, I know this brand is newer.

They've had a lot of early success. This one, this specifically in the Florida region, is, yeah, it's only a couple of years, a couple of years old. Alex, is this a crowded space? I haven't seen this specific of a take. Like, there's a lot of, like, pet boarding or, you know, daycare where you got to go to work and you're dropping your pet off. Same with boarding.

I haven't seen a lot of, like, grooming, hygiene, wellness-specific franchises. I've seen just grooming, but not at this level of kind of thought, attention, detail, membership-based. And from what I've heard about this brand is it's going really well. I think it's probably because of the joke I made earlier. I just think people are putting their pets on a pedestal much more so than they used to. This just seems like a really difficult time for this seller to sell this business. I'm looking at these financials.

So net income and in 2025 across both locations, which I agree, like, hey, they're not stabilized. So we'll give them credit for that. But 2025, you're looking at like negative 95,000 in net income. And then 2026 year to date is closer to 100,000 in net income. And let's just say you annualize that through June and it's about 200,000 in net income. So you've got these like very disparate, you know, two financial data points. One last year, negative 100.

one this year, annualized and forecasted to be 200,000. Either way, you know, if you take into account any historical data beyond this year, the asking price of 1.3 kind of seems like a lot to bite off given just the underlying financial performance. If everything goes amazing, maybe the numbers work, right? Yeah, I agree with that because the capacity for one of these locations, the highest in the system, I think is a little over 1,100 in one location. You know, this one has, yeah, members. So at each location, where did that number go?

It was like 527 and 560 or 90 or something. Yeah, the average is 780-ish per location today in the system. So they each have another, you know, 50% growth as far as capacity in the membership base, which is great. I mean, there's upside. You have the third location, but I agree with you. I think it's a little premature to price it as though. that's already happened or that's a guarantee or you still have to go get those leads you still have to retain those existing members etc and so yeah I think a little on the high end it's

almost as though they're assuming these two are at more capacity and the third one's underway buying a business might be the biggest financial decision of your life and most people try to make it alone cold emailing brokers reading financials at midnight and guessing what the numbers actually hold up. Acquisition Lab exists so you don't have to. It's the leading community, platform, and fun backing serious, vetted acquisitions entrepreneurs with a standing board of advisors who've actually done this. People who will talk you out of a bad deal as fast as into a good one. The education and the deal search tools are free and open to everyone before anyone asks you for a dime. The easiest way to feel that is a roundtable. It's a free live conversation

where you talk through what you're actually stuck on with other buyers and advisors who've been exactly there. Nothing recorded so it always stays in the room. Sit in on the next one for free at AcquisitionLab.com slash roundtables and tell them that Acquisitions Anonymous sent you. It's so fascinating here too because like these two locations, they're valuing location B at a higher value, 650,000 versus 600 for location A. And location B does have more members. But without like really delving into it, like these could, be it's such a new location. These could be members that have, I feel like there's always this tricky dynamic with like prepaid dynamics in instances like this that you've really got to delve

into. They might have run amazing specials right off the rip and given people significant discounts to sign a six or a 12 month. You know, hey, we'll give you 25% off if you go ahead and pay for 12 months. Well, the churn is going to, you're going to fall off a cliff and churn really, really hard. And in this case, it may have more members just because they haven't reached that cliff point yet, whereas location A is older, and maybe they have and they haven't completely built back up yet, or they're still in the rebuilding phase from that. I have an interesting thought on this because it's September, and if it takes about three months to close a deal with an SBA loan from L.O.I to close. Someone could come along and

negotiate an L.O.I in September, maybe get it under L.O.I. towards the end of the month. Now they've got three months to close. By the time you actually close, you could see whether these year to, you know, these year-to-date numbers actually pan out into a full year. And you could decide at the end when you see that whether you actually close or not. So, you know, sometimes I know a lot of people complain about how long it takes to get a deal done, but when you're a buyer, especially in a situation like this, where there's not a lot of history, the longer it takes you to close is sometimes an advantage because you could see what the full year 26 actually looks like. And then you might decide, yeah, this is a good deal, you know,

at a million three or not. That's a really good point. And I haven't thought about it in the franchise world. I mean, my, you know, my background's kind of tech startups and we raise venture capital, et cetera. And I see investors, you know, kind of do this trick a lot. We're like, oh, it's the long maybe or I'm on vacation for a few months. And they'll kind of intentionally, because it's free. free look, it's more data. I haven't thought about leveraging that same tactic or approach, leveraging the SBA and financing and getting more data or more of a free look along the way. Smart buyers aren't always in a rush. Yeah, a lot of times smart buyers are okay with things taking a while because that's more data. Well, I think like, you know, like you guys were saying,

I think also understanding the motivation of the seller, which is always a missing part, because we have the numbers and what the business does and all that, but it's hard to really get into, you know, why is this person selling? Why are they motivated? Because they might be open to seller financing where it ends up being a lot cheaper to buy this business. That's cash flowing. And you could get into it for much cheaper than developing it de novo. It's just, you know, how motivated is the seller?

Is there some personal issue and they need the cash quickly? or is this, you know, they found out operating a business was a lot harder than they thought. And they figure, hey, we're in year two with a lot of upside. Let's try to get what we put into it back. And, you know, someone else can run with it from there. I just think that, like, this is, you know, I can imagine two very disparate outcomes. You know, one where a buyer closes on this and they find all the reasons why, you know, this seller was getting out of it. You know, the unit economics aren't there.

maybe the franchisor is slightly underdeveloped. The leads that you thought you were going to be getting aren't converting. Like they have some data here on that. Like you could get in and realize like this is just a falling knife. And all I did was grab it on the way down. And now I'm bleeding also. And the seller, you know, before me was bleeding too. And somehow the franchisor is the only one making money.

But there's also a scenario where like a really astute multi-unit operator who knows what they're doing and they know the questions to ask, it's not that hard to imagine based on just the average kind of unit economics that you talked about, Alex, that you're getting from their FDD. It's not hard to imagine the cash flow in these two units at, you know, 100 or 200 more members per, you know, per location. I would think the cash flow starts to really, you know, accumulate in a very healthy manner. And then all of a sudden, with, the right operator, you could look back and this is just a rounding error, so to speak, you know, on the purchase price and on your entry multiple. And so I think this is where, you know, multi-unit experience and dealing with people in the franchise space is just huge. The disparity of outcomes is so significant. And like the, you know, physician or real estate agent who's never done an operating business and never done something multi-unit is like, oh, this is great. Like, how hard could it be? And the franchisor is like, you have a fat income. Like, great.

Well, yeah, we'll, you know, we'll prove you. And the SBA is like, you have a bunch of unencumbered assets. Great. We'll do it. No problem. And then all of a sudden, like, you're the sucker, you know, who's at the table and you don't know until it's too late. I just could imagine a couple different outcomes here and not a lot in the middle. Yeah. And that's where like, I think having the context of the seller because I was just trying to do some of the math on hey what is the margin on location A because it looks like location A has been a little bit longer you're open a little bit longer what if you got to the full membership potential and it looks like today they're getting like an average

ACV or you know average monthly revenue from a customer of ninety one dollars so if you do that on 750 members it's you know 820 grand a year and they currently have, you know, 24% margins. It's 200K a year in cash flow. There's a price where that could, you know, make a lot of sense and, you know, it could be a really good business, but for, I think what they're currently asking, I think it's a little too rich,

and there's way too many assumptions and things that would have to, to your point, go right. And, you know, I like, I like Heather's idea of, can we, you know, drag this out of it to get more information or can you work with the seller to structure, clever financing and maybe seller financing or something different for figuring this out. Well, and astute buyers will do that. You know, you give me your projections. Great. Deals don't close overnight. As we get closer to the finish line, let's check you against your projections.

You wanted credit for them. They didn't pan out, so I can't give you credit for them. You know, and it's a knife that cuts both ways. I mean, that happens upmarket all the time. Yeah, it does. Did they say, did I miss it? Did they say what a full capacity membership count would be per store? Yeah, it was like $7.70 is the average. The highest is, average is $7.70. So I think these both have another 50% or so to go.

Ballpark. The highest in the system is a little over $1,000. Okay. So plenty of room to keep going to get to full capacity. sounds like. Yeah, they're both below average and I would say that's fair because they're so new. I mean, I think 2026 is location B's first full year and maybe location A's second year or maybe it's their first full year as well. I'd imagine it's their second year. Yeah. Seems like location B is just a better location perhaps, but also experiencing, you know, to Mills's point, you know, kind of a,

artificial high from grand opening kind of numbers that may drop off to closer to A. So, yeah, it would be a tough one to value. And the more time you could get, the better, the easier it would get to value. I mean, I like the idea of someone, I like the idea of franchise resales just because you take out so many of the questions, you know, whether you can get this to this membership. And you've actually built out the stores and you've hired the people. It just takes out a lot of variables. But in this case, it's a little young to really value on cash flow.

This feels like something that wouldn't be impossible to build, you know, instead of buying. But, you know, I'm thinking about even just this note here about like the membership app for booking and things like, can you recreate the wheel? Absolutely. But do they have the name recognition of, you know, a major. major, major, major franchise? No, because there's no 800-pound gorilla in this space already. It's not like two men in a truck or something for moving, you know. But I would think that you're going to get some accumulating advantage with existing members, with the existing booking software and everything in place, versus if you're like, I'm going to try this on my own, I'm going to

build my own kind of DIY clunky booking software and like let, you know, my new, customers be my guinea pigs. Like, just, that just seems like a disaster waiting to happen. So I do think there is some value here. I'd be really curious. I mean, I'm not a multi-unit guy, but to me, like, the biggest question is like, how many units are there? You know, where are you in your maturity as a franchisor? Because that to me tells me, like, how sophisticated is the franchisor going to be? Or am I going to be almost on par with them? trying to like steer this thing as it's growing. I've just heard a lot of nightmare scenarios for franchisees in young franchisors

dealing with kind of growing pain. There's an interesting idea that this brings to my mind. It's different from building than the build versus buy equation. It's more like could you buy an existing pet grooming business? I'm thinking of the ones that have been around my area forever. and convert it to a subscription model. Kind of reminds me of the way people have done over the years with software. You know, take it from a perpetual license to a subscription.

Could you have more success just going in and buying sort of the old school grooming business that's been around already has the trust of the community and try to market it differently and similar to car washes too, the way they've gone to that kind of model. So it kind of just brings that whole concept into your mind. Yeah. Yeah, something I always, when I consider franchise concepts, whether it's for someone we work with or myself, like I'm developing 10 pop-up bagels right now. I don't know if you guys have heard of the brand or the concept, but it's a bagel concept out of New York, fantastic revenue payback period of less than a year. But the unique thing is, is it being a part of that system lowers my OPEX every year because they have a supply chain built out. They've got a cult-like following on the marketing sign. So the question, the reason I'm saying this is, I always ask the question, you know, not just today, but in year five or year six of this relationship

of what is the franchisor doing for me lately? And if the answer is, you know, like, oh, they have some branding and, you know, some technology, like that might be a good enough answer if it's truly proprietary and it's driving leads to me in a very meaningful way and I don't have to do that anymore. But a lot of the times the answer is some major supply chain or OPEX reduction. Again, sometimes marketing, but mostly, you know, cost. And that's what I think. think about with this brand is they probably give you a ton of value up front with site selection and branding and the booking software. My guess is in year six, you're probably wondering what Heather was saying. I was like, but I've been better off, you know, buying up someone else's, getting a customer

base and then me kind of hack in my way through. And by then, I'm sure AI is going to be so good. You probably can hack together a really good booking, you know, portal and option, you know, at home in 10 minutes. I don't know if we're fully there yet, but we're getting close. Or the robots will be washing our dogs. Yeah. Yeah. I look forward to that day. I think it does have a lot of potential. I think the biggest question here is like, what is the actual exiting seller's circumstances?

And does that tell you some story that says, you know what, there might be distress or there might be problems under the surface that I won't find until later? That would be like my biggest question because I think it would really impact price. Yeah, I agree. I think for the right price or right structure of the deal,

like 1.3, I mean, it's still probably high even with seller financing, But I think there's a world where less cash and a percentage of future revenues is really interesting. Or is my guess is the seller is trying to get at least their cost back out of it plus the work they've done the last 12? Just looking at the cost to build one of these from scratch, it's like kind of right around this number plus compensation for some of their time. So I get why they're trying to anchor it here. So maybe there's a creative solution that gets the right buyer into the system. them who can pick this up from 200K this year and really get that to 200K per location over the next year or so.

Yeah, yeah. Heather, what about you? I can't finance it because there's not enough historical cash flow, so I'm with Alex. It has to kind of be some creative structure where the seller has a lot of financing or skin in the game in some other way. But it's an interesting concept. I really like the idea of a pet med spa with memberships. It's great. Like, checks all the boxes.

I'm into it. Yeah. Alex, that was an awesome deal from Franzy. Thanks for bringing another good one. You always bring your A game. So that makes the conversations a lot better. Yeah, appreciate. If there's something that you guys would want to specifically see next time,

just let me know. We see all sorts of interesting, kind of wild, crazy things. Because, again, franchising is not an industry. It's a business model, and it touches just about every concept you can imagine. Well, if you enjoyed this one, go to ACQUAnon.com. There's over 500 more, not quite just like it, all slightly different, a different deal every episode, but there's something there for everybody. Chances are, if you've considered it, we've looked at something very, very, very close to or similar. Something's exotic, something's very boring, but it's something new every episode.

So thanks, Alex and Heather. And thanks, thanks, listener. We'll see you on the next one.