Midas

3 times a franchise is worth buying

Kevin says a franchise makes sense in three cases. First, the franchisor gives you one of Hamilton Helmer's 7 Powers, such as a brand or a cornered resource like Chick-fil-A's recipe. Second, you plan a roll-up, because identical franchise units are easy to integrate and franchisors oversell units, which later need consolidating. Third, you would never start a business without the training wheels a franchise provides.

“I think there's, 3 situations where doing a franchise makes sense. I think the first one is if the franchisor actually 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 7 powers. If the franchisor gives you one of the 7 powers, it could be worth it.”

Steal thisOnly buy a franchise if it gives you a real power (brand or cornered resource), a roll-up path, or the push you need to start at all.