Acquisitions Anonymous - #1 for business buying, selling and operating Breaking Down a $10M Primrose Franchise Resale
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Jul 4, 2025 Connor Groce, an expert in franchise resales, joins to analyze a $10.9M Primrose School in Dallas-Fort Worth. They navigate the challenges of valuing a preschool franchise, discussing the complexities of financing with SBA loans and sale-leaseback strategies. The conversation highlights the franchise's strong brand reputation and ideal buyer characteristics, like community ties and a passion for early childhood education. They also explore intricate pricing strategies and market dynamics in high-end preschools, emphasizing cash flow and enrollment's impact on value.
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Impact of Real Estate on Franchise Sale
- Including real estate in a franchise sale complicates valuation and financing due to the intertwined cash flows.
- SBA loans may require splitting loans for enterprise and real estate, increasing complexity.
SBA Loan Strategies for Franchise
- Lenders underwrite owner-occupied real estate and operating business cash flow as one package.
- Using an SBA 7A and 504 combo loan can finance both the enterprise and real estate.
Separating Real Estate Ownership Options
- You can separate ownership structures for real estate and operating business under SBA if the operating company guarantees the loan.
- Selling and leaseback of real estate can provide cash but is best when the real estate is below market value.