Brian Beers·February 16, 2023

How to Roll Up Legacy Franchises | Brian Beers Interview

Brian Beers is a third-generation Midas franchisee who, together with his brother Chris, has rolled up 30 Midas locations in the Philadelphia metro and southern New Jersey, generating approximately $36m in annual revenue with around 200 employees. The family has been in Midas since 1976 (his father and grandfather), but Brian and Chris began actively acquiring additional locations in 2016 to create their own separate entity, eventually buying out their father and uncle. Nearly every acquisition has been seller-financed at 70-97.5% of the purchase price, enabling Brian to complete off-market deals with minimal competition — almost all purchases were private, with Brian often the only buyer. The episode is essentially a masterclass on the franchise roll-up playbook: why legacy, fragmented franchise systems (1,000+ units, 20+ years old, many individual owners) create ideal acquisition targets during the generational silver tsunami, how the franchise network creates built-in trust and deal flow, how plug-and-play integration makes scaling far easier than independent business M&A, and how seller financing structures make the economics compelling for both sides. Brian is candid about the limits: legacy locations are often in stale markets, the franchisor can veto creative ideas, two non-Midas franchise attempts both failed due to divided attention, and the business sits just below the $5m EBITDA threshold needed to attract private equity at full value.

Deal facts

purchase price: varies by deal; one example: $2m for 5 stores (~$600k SDE)
multiple: ~3x SDE typical; up to 3.5x for better locations
sde ebitda: ~$600k SDE for 5-store example; ~10% margin on $36m run rate across 30 stores
revenue: $36m run rate (30 locations)
financing structure: Seller financing 70-97.5%; one deal: 97.5% seller-financed, $50k down on $2m purchase, ~$10-12k/month over 13 years; first two acquisitions used SBA loan
notes: 30 Midas franchises total in Philadelphia metro and North Central New Jersey; ~200 employees; best locations make ~$20k profit, worst can lose $100k; started buying additional locations in 2016 with brother Chris; third-generation family business (father started in 1976); previously failed at two other franchise concepts outside Midas

Why this business

It's a family business — his dad got in in 1976 when he was 22 years old with his grandfather. Brian joined after college when the business wasn't doing great, helped grow it, and then in 2016 decided the only way to make more money was to have more locations under his and his brother's own entity. Franchising provided the ability to scale quickly through acquisition in a way an independent business never could.

What's working

Seller financing: nearly every deal done with seller financing (70-97.5%), making acquisitions fast, cheap, and off-market — most stores purchased with no competing bidders
Franchise network trust and off-market deal flow: as an established franchisee with a strong reputation, sellers approach Brian and his brother directly; almost all purchases were private with no public listing
Plug-and-play integration: franchise system means point-of-sale, uniforms, and core processes stay the same on day one; ownership can transfer Monday and payroll just comes from a different account
Favorable reputation with employees: back-dating tenure, offering better benefits and compensation than prior owners, and being a known local presence reduces employee turnover on acquisition
Franchisor support and FAC participation: Midas has a franchise advisory committee; Brian sits on it and has had best practices he pioneered adopted system-wide
Hired a CEO in August to manage district managers, freeing Brian to focus on growth, expansion, and strategy
Parts revenue (~50% of P&L) provides margin beyond just labor, differentiating from pure service businesses

What's hard

Real estate is the binding constraint for new location growth in the Philly metro — finding 4,000 sq ft automotive-zoned prime retail is very competitive
Legacy franchise locations are often in older, rougher neighborhoods with no new housing development nearby; getting into growing suburban markets requires building new locations from scratch
Franchisor can veto creative ideas — a satellite three-bay garage concept Brian had been developing for years was denied by current Midas leadership
Two prior franchise ventures outside Midas both failed, losing significant money, because Brian's attention was split and he lost focus when Midas needed him
Scale threshold for PE exit: need at least $5m EBITDA to attract private equity interest; currently in 'no man's land' below that threshold
Under $5m EBITDA, exit options are limited to other franchisees, likely at a lower multiple than PE would pay

Notable quotes

Almost every deal we've done has either been we bought in cash if it's like a one-store deal for you know under 200k or we seller finance it in which the seller will finance I mean 70 80 90 my biggest deal was nine ninety seven point five percent seller financed.

Think about that — you want to try and buy something you're the only potential buyer and it's like it's your deal to mess up or deny it.

If I was running Beers Tire and Auto or whatever it would be called as an independent business I mean it would be I would be nowhere close to where I'm at today in terms of the size of the company the money we make you know my lifestyle to be able to surround myself with you know a really good leadership team who can handle a lot of the day-to-day that gives me freedom.

That's why franchising is better. I'm talking to a guy now and another group of stores it's like five locations, there's real estate involved, he only has like one mortgage, he's making — he's doing very well better than my store like on a per average basis and I pitched him on a seller finance deal.