Hey folks,

Got some more of your Q&A today. I love hearing from you all.

By the way: I’ll be answering a bunch more questions live, later this month with Michael Girdley. 

We’re discussing the factors you need to weigh when choosing a business, but we’re setting aside a ton of time to take your questions. 

Michael Girdley & Connor Groce
The 7 Tradeoffs in Choosing a Business
Feb 25th, 1pm ET
RSVP here for free. 

There’s typically not a lot of negotiation when it comes to franchise agreements. They’re standardized for a reason.

So you're not going to get a franchise agreement that lets you just walk away and “disaffiliate” - as in, keep the business running but unplug it from the franchise.

Think about it: you've adapted all their IP, started the business, and now you want to just take it and run? That's not how it works.

Usually, your options are: terminate (shut the business down) or sell the business.

Sometimes franchisors have a right of first refusal on the sale. But yeah, talk to a lawyer if you're getting into specifics here.

The reality is: franchisors invest the vast majority of their resources in those first six months when you're not giving them anything back. They don't even break even for years. So if you're three months in and want to bail, it's not going to be clean.

Sometimes. In a lot of cases, you probably can probably pull off most of what a franchise offers if you're resourceful enough.

Here’s the litmus test I use:

Does this franchise let me accomplish in 3-5 years what would otherwise take 10-20 years on my own?

That is not a trick question or a leading question. Sometimes the answer is yes, and sometimes it’s no. 

Because it’s not just marketing systems. It’s also startup support, training, vendor relationships, brand recognition, ongoing coaching, and the network. If they’re good, all those things put you on an express lane to scale.

It's the same decision as taking the toll lane on the highway. You can take the free lane and risk getting stuck in traffic, or pay a bit extra to (hopefully) get there faster.

→ Related read: Are franchises worth the fees you pay?

The most ignorant thing I hear from buyers is "I just want to invest wherever I can get the highest ROI."

That either means you think you're good at everything (you're not), or you haven't thought through what your life will actually look like as a business owner. Either is a problem.

The better approach is to get specific. Pick a niche. Have predefined preferences.

When you show up with clarity and humility, brokers are more likely to take you seriously. You look like someone who's done the work, not just browsing.

Also, broker outreach beats aimlessly scrolling BizBuySell.

One thing I've learned: selling to more affluent customers adds durability.

In a K-shaped economy like we have now, wealthy people keep spending. Everyone else tightens up.

Also, don't rely on industry-level assumptions. My waste management business should be recession-proof. You’d think people keep making trash no matter what. 

But the market I serve is where 80% of the world's RVs are manufactured. And RV sales are definitely not recession proof, so we took a hit. 

You have to look under the hood.

I don't spend time browsing BizBuySell.

It's a trap. It's a way of getting dopamine rushes without actually doing anything.

Some people say there are no good deals on BizBuySell. I disagree. There are some. But it's really hard to get a response from brokers because they're getting bombarded by tire-kickers.

There are other marketplaces—BizNex, BizScout—but they're all about the same.

Ask yourself: Does this get you closer to your goals?

If the time you're spending looking at businesses for sale isn't moving you closer to ownership, what could you be doing instead that actually would?

I have friends in Mosquito Joe who've made a lot of money. Even they would tell you they're not sure they'd get into that business today.

Why? They got in during the era of what I call "$5 footlongs and $5 Facebook leads." Early 2010s. The digital marketing landscape was completely different.

Growing a low-ticket service business back then was way more profitable. The CAC was so low that the recurring revenue flywheel just spun beautifully.

If you tried to grow that same business today—where the average ticket is under $100/month—your CAC has to be really low to be profitable right off the bat. It's not as capital-efficient as it once was.

That's why when I'm looking at B2C service businesses reliant on digital marketing, I prioritize ticket size now, even at the expense of recurring revenue.

→ Related read: Why I prefer $7,000 one-offs over $200/month clients

That’s all for today, everybody.

Again, please do join me (and Michael Girdley) on Feb 25 - totally free, and I promise you’ll learn something. I know I will. RSVP here.

And, if course, if you’re ready to buy a franchise, I can help you find the one for you. Book a call anytime.

Thanks for reading.

Connor