Franchises are worth considering only when the franchisor provides genuine competitive power, when pursuing a rollup strategy, or when a franchise is the only way someone will actually start a business.
Kevin outlines three scenarios where buying a franchise makes sense: rare franchisor 'secret sauce' like brand power, systems designed for rollups, or as training wheels for hesitant entrepreneurs. ✦ AI generated
Kevin · My First Million · 2026-08-19 · original ↗
starts at this moment · 35:03
“And also, did you know what that was before you sold or the space gave you the time to figure it out?”
I think there's three situations where doing a franchise makes sense. I think the first one is if the franchiseor actually has some secret sauce... The second one is if you are going into it to do like a rollup... And then the third reason is basically my reason which like if you're literally not going to do anything else. You're not going to do something unless you feel like you have the training wheels of a franchise.
verbatim transcript · starts at 35:03
35:03current perspective on like is franchises a good good place to go or like did you discover some other franchise along the way that you're like I wish I had done that one that's now that I understand what makes these work that's a way better one tell me something smart about franchising >> I think there's three situations where doing a franchise makes sense I think the first one is if the franchiseor
35:22actually has some secret sauce and like the nerdy way that I think about it is if you listen to like the acquired podcast they do the seven powers if the franchiseor gives you a seven one of the seven powers. It could be worth it. So that's brand with like the Midas touch or it's like cornered resource like the Chick-fil-A recipe you can only get at Chick-fil-A. That's worth it. Those are
35:42rare and in high demand. The second one is if you are going into it to do like a rollup. Franchises are friendly for roll-ups, I think, because you just have carbon copies of each other. Like the systems are like the integration is the hard part of a lot of roll-ups. The integration of a franchise is just like the people stuff. It's pretty straightforward to roll up and it's like
36:02a walled garden. Like if you're in the system and you have the appetite and the capital to do a rollup, you can do it in a lot of cases and a lot of franchises are ripe for consolidation because they're incentivized to sell a lot of units because they make franchise fees on each unit. And then what that means is in a couple years it's just like begging for consolidation. And the third
36:22reason is basically my reason which like if you're literally not going to do anything else. You're not going to do something unless you feel like you have the training wheels of a franchise. That's what it took for me to do it. Like I don't regret doing it. I probably won't do another franchise in my career. But like it played a important role in my uh it got you where you wanted to go.
36:41>> Right. I wasn't going to do it otherwise. >> Well Kevin, you're you're the Thank you for doing this. >> Yeah. Thanks guys. >> Awesome. Thanks for coming on. >> Yeah. >> Bring him in. What's up? >> What's going on? >> Good [clears throat] to meet you. >> Great meeting you. >> What's up, brother? >> What's your name? >> Noom. >> Noom. >> Yes. >> Noom. Welcome to the show.
36:59>> Thanks for having me. I'm excited. >> Okay. I don't know if they told you what you're getting into, but uh maybe start with what we call the big juicy number. So, give us one number that'll get us interested. >> All right. Big juicy number. We're doing $430,000 a month selling heated jaw massagers. >> Jaw massagers. >> Yes, sir. >> Okay. So that was my nickname in high