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Dan Brady’s Key Move: Reducing Risk by Buying Existing Franchise Locations

Dan’s Story:

Dan and the rest of the Brady Family—OK, call them “the Brady Bunch” if you insist—were named the Mail Boxes Etc. Franchisee of the Year for 1999, and their business has grown spectacularly since then. In our book, “StartupNation: Open for Business,” we detail the amazing story of how the Brady Bunch overcame big challenges early on and ultimately made it to the pinnacle of franchising success.

One of the most unexpected twists in their (ad-)venture was the day they heard the news that UPS was acquiring Mail Boxes Etc. and would rename participating franchise locations “The UPS Store.” The Bradys’ business was already performing well, but when they hung the Brown brand over their front doors, things got even better.

“We saw a big jump in package count and revenue,” Dan says. “Mail Boxes Etc. was a good, solid brand. But it didn’t hold a candle to UPS.”

And now, after posting about $3 million in revenues for 2004, the Bradys plan to double that number in the next few years.

Dan’s Key Move: Reducing Risk.

It may not be the most thrilling way to go—it’s a bit like buying a used car instead of a spanking new model. But Dan Brady, his siblings, and his father have found that the surest path to success in franchising isn’t to open a brand new store in a fresh location—it’s to take over a hobbled existing location and simply make it better.

Dan and family have made that business model work over and over again. “Of course, everybody wants to ‘live in a new house’!” he allows. “But we’ve learned over time: If you buy an existing location with an existing customer base and cash flow and infuse it with operational smarts and great execution, the rate at which you can grow positive cash flow and your odds of success go way up as compared to starting the whole thing from scratch.”

There can be lots of reasons that old locations offer great promise to a new owner. Sometimes, current franchisees haven’t given the store the attention it needs. Maybe they’re near retirement, or they’re “passive” investors who don’t actually work at the business.

Another plus, according to Dan? “With an existing store, it’s easier to perform your due diligence and reach the right conclusions for a business plan because you already have a track record to evaluate.”

One last positive note about this risk-reducing Key Move is that franchisors themselves will usually help you identify acquisition opportunities because they want revenue per store to be maximized—they can’t afford the revenue losses and bad PR that result from a store that’s limping along, or worse, headed for failure.

Dan’s Bonus Insight:

It takes a whole lotta love for a family of six involved in a business to make the enterprise a success and the family relationships a success all at the same time. “The most difficult thing is keeping business and personal stuff separate when you’re dealing with family,” Dan says. “I mean, you get into a business argument and suddenly you’re three years old again! But the family teamwork can also be the most rewarding part of this.”