A Buyer's Perspective: How to Buy an Established Business and Franchise

Jennifer and Eric interview Michael Lake, the new franchise owner of Signarama Framingham, MA, a large-chain supplier of custom-made signs, banners, and decals. Michael is an accomplished Emmy® Award-winning media executive with over 20 years of experience. Prior to purchasing this business, he worked at ESPN for over 22 years. In this episode, Michael shares his perspective on what it's like to purchase a business and some of the key lessons he learned along the way with the due diligence and transaction process.

Key Points

[2:35] A little bit about Michael and what he was looking for when purchasing a business.

[6:00] The franchise model seemed attractive to both Michael and his business partner.

[8:55] It was great to have a clean handoff from the previous owners into Michael's hands. It gave customers the stamp of approval that he and his partner were trustworthy.

[11:25] Michael had discovery days with the franchisor where he was able to better understand the different types of franchise options available and what style would fit Michael's temperament.

[12:15] What did Michael's advisor team look like?

[15:20] Michael attempted to purchase another business with Eric and realized during their due diligence process that the business wasn't for him.

[16:20] Good advisors will tell you what you need to hear, not what you want to hear. Under Eric's guidance, Michael was able to avoid a bad purchase.

[18:35] Why didn't Michael want to purchase that particular business?

[22:05] What did the due diligence process on a franchise look like?

[25:45] A year into owning the business, how has it been going so far?

[29:30] Despite paying for an already-established business, you can still easily lose that through poor management.

[33:15] If Michael had to do it over again, he'd want to have more cash reserves.

Tip of the Day:

There are no stupid questions. Ask them all. Don't just sign things. Ask!

Mentioned in this Episode

Tworld.com/locations/boston

Riw.com

Transactiontalk.com

Michael Lake

Website

LinkedIn

Disclaimer:

The material on this site may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts. This site is solely for informational purposes and provides general information only. Nothing on this site should be construed as legal advice or consultation either generally or in a particular case. Neither the receipt nor the distribution of materials constitutes the formation of an attorney-client relationship.

Quotes

"It's absolutely critical to have a team that you know is working for you and on your side, and protecting your interests."

"The end goal is for the new business owner to have a smooth transition."

"As much as you want this business purchase to work out, you also got to know when to tap out and have those advisors there that can guide you."