$5M Mobility Business: Solid Franchise or Aging Market Risk?

0:25Welcome to Acquisitions Anonymous, Hello, another episode of Acquisitions Anonymous. We don't have 100 % ears anymore. I'm thumbs downing on just the plus inventory line. Hey everyone, it's Bill. And I want to tell you about an event that's honestly become one of the highlights of my year. And that's Main Street Summit in Columbia, Missouri. I've been a speaker and an attendee at Main Street Summit for a couple years now. And I'm going to tell you firsthand, it's really not your typical conference at all. It's more like a thousand business owners, operators, and entrepreneurs all gathering in Columbia, Missouri for three days of practical and actionable business content.

1:03It totally takes over downtown Columbia and they have probably 20 different venues. It's very cool. One of the things that really sets Main Street Summit apart for me is the relationships. I wrote on X after last year's event that it was great talking about business and life with people who really have become a much more than just conference buddies. You know, business really can be a great vehicle towards deep friendship if you're willing to go there with people. And that's exactly what happens at Main Street Summit. You're really not sitting in massive auditoriums. You're in intimate settings, art galleries, small classrooms, etc.

1:34With world-class business owners and operators who have lived the challenges that are keeping you up at night. So really, no matter what industry you're in, from plumbing to e-commerce, there are specialized tracks designed for real practitioners like you. Main Street Summit is coming up. It is November 4th through 6th, 2025. It is in Columbia, Missouri. Do not miss this chance to connect with people who really get what you're building. You can visit MainStreetSummit.com to grab a ticket and I will see you there. I'm speaking again this year. So if you find me, come up and say hi. See you at MainStreet Summit.

2:07Yeah, my video is going to be choppy today. I don't know why. I just upgraded to a new version of Mac OS, which is always a huge mistake. Like never do the point zero. That's the one thing I learned working in software more early in my career, never upgrade to the point zero. Or are you AI? Are you an AI agent today? I mean, if I could send AI to do this podcast for me, it might make it better. You would do it. That's what I think. Maybe. So people learned back in the late 90s not to trust the point zero version of software. So our engineers came over the brilliant idea when I was working in software, and they just skipped the 0.0 release.

2:48They would just, we did, we skipped 6.0 and we just went from 5.1 to 6.1. And they were just like, cool. Okay, let's see if this tricks everybody. And it did, unfortunately. Some people still say it was, still had the quality of a 0.0 release. Michael, you want to guess what I was learning in the late 90s? How to use a spoon? Yeah. He had to do, he had to go there. anyway we have feelings heather and i have feelings i know we're real people at least i am today uh so does somebody have a deal you have a deal i do have a deal yes this is so this is an established leader in mobility and accessibility solutions so asking price is 2.695 million They share$4.95 million in revenue,$840K of SDE.

3:49And business description, established leader in mobility and accessibility solutions. And this is in North Carolina. This established three-location franchise business offers a unique opportunity to enter the thriving mobility and accessibility market. The company specializes in the sale, rental, installation, and servicing of a wide range of equipment, including stair lifts, wheelchair lifts, ramps, patient lifts, and more. Key highlights is a proven franchise model backed by a reputable franchisor. This business leverages a successful system for operations, marketing, and customer service. Diversified product portfolio caters to a broad range of client needs with a comprehensive selection of mobility and accessibility solutions.

4:28strong customer focus, established reputation, trusted provider within the industry, fostering loyalty with individuals, families, commercial businesses, and healthcare providers, favorable market dynamics, growing demand for mobility accessibility solutions due to an aging population. This is an excellent opportunity for a qualified investor to acquire a well-established business within a high growth market. FF &E value shown is the gross amount as shown on the tax return. Current estimated value to be used for asset allocations will be detailed in the confidential information memorandum. So they share 60K in inventory included in the asking price, leased real estate, 508K in FF &E, 17 employees.

5:06So they're talking about this is a three-location franchise across Virginia and North Carolina, two locations in Virginia and one in North Carolina.

5:19And then they break down a financing option. It looks like they're willing to sell or finance just over 400K, over 120 months. So what do y 'all think? Okay. So Heather, what do these guys do? Well, this is, I think this falls into the category of age at home, you know? So there's sort of an industry around helping people who are getting older, you know, be able to stay in their two-story houses or it doesn't even have to be two stories, a house that has stairs, you know, in some part of it. So you've got these chairs that will take you up the stairs. So it's not an elevator, but it sort of attaches onto the side of the wall and takes you up the stairs.

6:02They said ramps, you know, all the kinds of things that you would need to remain, you know, for the house to remain accessible if you were disabled or, you know, could no longer do the stairs or in a wheelchair or something like that. So I think it falls into the category of it obviously assists people with disabilities, but the growing market, the growing part of the market, I would think would be the age at home market. Yeah, this is basically the other piece of like, okay, I need to go hire a caregiver for a grandma or a mom. This is like what the predecessor to that is hiring a company like this to come into the home and say, if she's going to stay here, obviously you need the caregiver, but how do we modify the home to make it accessible?

6:40I think another key thing that they do are the bathtub conversion things where they have the doors on them, that kind of thing. So what does my revenue profile look like? So is this basically project work plus repair? Is that what I'm thinking? Or am I getting paid monthly for installing some of this stuff? So that's one thing that they don't break out is how the revenue is broken down. because when you think about it, like they say, the sale, rental, installation, and servicing of a wide range. So when it comes to installation, like installing a stairlift, that's you're selling the stairlift, you're installing it, probably subbing out that labor as a one-time project type thing.

7:23But then there's going to be some servicing. There might be some rental. I don't know if they, instead of selling it, if they're like renting the stairlift, I bet with other equipment they do. But, you know, I think where you're going with that question, Michael, that I, it's my first question too, is like, how does that break out? Because the economics of like a high ticket project-based one-time service look different from something that you're, you know, leasing and getting residual revenue from. Yeah. Well, and this typically, you know, home installs like this don't have the same economic characteristics that are so desirable, say like in commercial situations.

8:02So like, I don't know if you guys have ever dug in on commercial elevators and how that market works. It's super fascinating. You know, there's only like kind of one major player in each geographical region and maybe a number two. But by and large, like it's a total monopoly style business. And they make a lot of money from repairs and maintenance. Like it's just this enormous cash printing machine. But we actually, so my house actually has an elevator in it, which is crazy. And before you judge, Heather, the reason we have before you keep judging so the previous owner of the house had a special needs daughter so they needed to be able to get her up and down so that's why we have an elevator that doesn't get used by anybody because my kids are like vacuum style it's like a real elevator I'm not the Jetsons Heather they have those now that's why I bring it up I've seen another franchise concept where it's like a vacuum tube in your house.

9:07So it's a cheaper way, I guess, or maybe it just works in some configurations more easily. But there is that too for the age at home type industry. Yeah. Well, I agree with you. My point there was that for our home elevator, like it rarely gets used. It rarely breaks. like we don't like there's not a huge maintenance revenue stream for this elevator because it's not getting used like a building one and it's not it doesn't have the same kind of if it goes down we just walk down the stairs right like that's just like we make it work so you know it makes me wonder about how important and how good of a business this is if you're probably just basically doing mostly project work which is less desirable than the maintenance kind of recurring revenue stuff you could possibly get.

9:55My hint is when they don't break out the revenue type, the mix, the revenue mix, it's usually because it's the kind that we don't want, project work. So if it's got any reoccurring or recurring revenue, they're going to say it, usually. And if it doesn't, it's usually a pretty good hint that this is project work. And that seems like how it would work here. You pay to get it installed and it's a one-time deal. But it's a nice margin and it does, I guess it reflects the fact that it's probably project work. Yeah. And like, even if it is all project work and it's high ticket, you know, but it's a solid average ticket and solid margin, like I still think this can be a solid business because it's attached to, you know, as they mentioned, it's attached to a market that's growing.

10:41And, you know, I don't see how that can reverse in any way. So I guess if you were to assume it's all project revenue, is that really a deal breaker? No, I don't think so. I'm just curious. It just makes me feel better when I know there's future revenue coming and I don't have to go hunt what I'm going to kill, right, to use an African Savannah metaphor. So I do have a question for you, Connor. Why is this a franchise? What makes this a business I should franchise versus going to learn the space and starting de novo? Yeah, well, I mean, I think that you could go either route. If this is the brand that I think it is, it's a multi-brand group that also has their hands in the home care space and a number of different concepts.

11:31And so they do a lot of cross-promotion between their home care brands and this brand, if it's the one that I think that it is. I think that whenever you have these high-ticket project-based businesses where more of the P &L, your cost of goods sold is going to be more than your payroll is typically. And if it's a franchise where they're getting collective buying power on their inventory, I know a lot of franchises where they're saving more on their inventory costs because they're a part of this franchise than they're even paying in a royalty. in which case it's ROI positive from day one. And then any of the ancillary benefits you get from the franchise is, you know, just gravy on the biscuit.

12:16Those are a couple of the reasons where if it's a strong one, I think that this could make sense. It could present advantages over just going out and learning the space on your own. With that said, a friend of mine is doing this exact business out in California and is doing just that. He's learning it on his own. And if he were here, he'd tell you all the good, the bad, the ugly that comes with that. Hey guys, I joined late. Hey, Bill. How's everybody doing? Good. We're talking about this basically home mobility business franchise. And where did you say it was, Connor? It's in North Carolina. Well, it said North Carolina.

12:54And then they have two locations in Virginia and one in North Carolina. So probably right on the border. But Bill, this is who you call when grandma needs a caregiver. but these are the folks that come in and, you know, retrofit the house to make it, you know, possible for her to age in home. Oh, so I'm turning 40 in a couple of months. So they'll be coming to my house before you know it. Yeah. There you go. There you go. So put in one of the little chairs that goes up my stairs and everything. Yeah, exactly. Yeah. But Connor, to your point, like the, one of the benefits of being part of the franchise here would be the, the buying power, the collective buying power.

13:27Could you not approximate something like that with a buying group? You know, is it sort of that's what the franchise franchisor is here? It's basically effectively a buying group and maybe some marketing. I mean, I think that that's part of what they're doing. Yes. I'm not actually familiar with a with a buying group. And if you were to break that off and do it independently, what that would look like. I've seen it in pool services. I've seen it where they have basically, you know, an entity that they all own collectively, kind of like you might see in farming, where they all basically collectively buy the chlorine, the chemicals, whatever they need in large quantities, and then pass along the savings to the members.

14:09So I've seen it. So I guess it's similar to what a franchisor might do, but you've got to sort of organize it yourself. Yeah, that makes sense. Have you guys talked about who pays for this stuff yet? Is this entirely private pay? Is there any insurance? Is there any subsidy? Or is it just people paying via credit card? Do we now? Well, according to some stuff I read on Twitter, boomers have all the money. So I think they're just taking it out of their time. That doesn't mean they like to use it to pay for stuff, Michael.

14:43That's why they have all the money.

14:52This is disability benefits growth. So projected increase in disability benefits will empower more individuals to access and afford mobility solutions. So yeah, the boomers need more money. So we need to further subsidize, you know, their ability to get up the stairs. The millennials are going to be needing to get up the stairs pretty soon. You better - Gen Z will not have stairs to get up. So we won't have that problem. Yeah, we skipped Gen X again. Yeah, we're going to rename Gen X to Silent Generation. The real silent generation is Gen X. the funniest thing about gen x to defend heather and i the funniest thing that happened recently with gen x was gen x has been basically just quiet silent ignored for like a decade and then last few weeks uh like some gen x's started to get on twitter and on like and on like articles it'd be like hey we're gen x you know this is what's going on this is where the sandwich and each of the sandwiches screwing us over and then literally like 36 hours later some gen x gets on New York Times and writes like a scathing opinion piece about how Gen X, meaning their generation, needs to shut up and sit down and do what they're told.

16:06And I'm like, you're like enabling, you're enabling what's going on here. Anyway. So anyway, Bill and Connor are not going to find this funny. Heather, I bet you find it at least somewhat, somewhat you're like, yeah, exactly. Yeah. We always get forgotten and told to shut up. So there you go. Wow. So the reason I asked— It's like, shut up, we're going to go back to the top. We're going to put that back in the closet a little bit. Shut up, Gen X. Before we move on from that, my question has always been on the generational conversation is, why is Gen X not as resentful towards the boomers as Gen Z is?

16:45Because the boomers are really the ones that are occupying the spaces or staying in their jobs too long. and are creating this like glass ceiling based on what it looks like for, and Gen X are the ones that have waited on those jobs that entire time. So I've always wondered that just to put a bow on this conversation. We are saying that. You guys just don't listen to us. Oh, okay. Because we're not old enough to be smart enough that you're like, oh, these old people know what they're talking about. But we're also, there's not enough of us treating people like so. That's right. Anyway, I've been tweeting this for like years.

17:14Nobody cares. So, all right, anyway, sorry. Maybe if you tweet a few more times, Michael, people will care. But back to the paramex on this thing, which is how I ignited this generational divide. I was thinking that could be another benefit of being part of a franchise. Because if you have, you know, payer challenges where you're like hustling to collect from insurance or from third party payers, that is a level of scale that a franchise, a level of scale and SOP and kind of like, here's the tricks for filing the insurance right. here's what you do and they don't pay you, you know, or the insurance sees the franchisor's logo on the letterhead and pays timely, or maybe even they have a specific arrangement, you know, a franchisor does with the big payers.

17:59So that could be, if this is relying on third party payer a lot, that could be a benefit of being a part of a franchisor. Totally could. And like that's validated in the home care space directly. Like there are some that, you know, do a lot of work with the VA and they already have those, you know, those contracts in place or they do, you know, they do a lot of Medicaid reimbursed services and that presents advantages. I just don't know until you mentioned it. I didn't even think about that in the context of this business. So I don't know how much of the revenue is coming from, you know, from insurance.

18:31Yeah. I mean, it could be insurance to your point, could be VA, you know, could be veteran benefits, could be government benefits of some kind, you know, so there's third, there's government payers, there's third party private insurance payers. I mean, all kinds of potential third party payers in this. So I would be curious about that mix if I were looking at buying this business and I would want the franchisor to have a good plan to assist me with whatever my payer mix was. I agree. So we would talk about trends a bit. There's two trends that come to mind. One is that a lot of new homes are being built with kind of, you know, anticipating aging, like people living in them, Like the place my in-laws live in Florida is totally optimized for like 80 year olds with mobility issues and they're not 80 yet.

19:20The second thing is the boomers are a huge generation. And like, are you buying this business potentially at the peak demand of this type of conversion? Because like Gen X is like generally trying to avoid this kind of like immobility type situation by and large. So anyway, just those are the two trends I'm seeing. What do you guys think? Yeah, I think it's, are you buying a swimming pool construction business, like in the middle of the COVID boom type situation, I think is like a somewhat of a parallel. It could be the case. I just, I think that the ramp for that, or not the ramp, the timeline for that kind of cycle is pretty long.

20:02So I still think that there's a solid runway, but I don't know that we're ever going to see, when we look 30 years in the future, we're not going to see the same tailwind that we see today. And so I think the question for a buyer in this situation is, are they comfortable with that? And are they going to be able to squeeze enough of that growth out before they face any kind of a decline? Hey, everyone. It's Bill. And I want to tell you about maybe the most exciting sponsor we've had in a long time on the pod. It's called Capital Pad and it is the thing that I wish existed when I started my journey of operating and investing in small businesses.

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21:22Basically, Capital Pad professionalizes investing in small businesses, and the returns can be really, really good. I'm so stoked they exist. It's founded by my friend Travis, who is a phenomenal entrepreneur in his own right. So if this sounds like something that's appealing to you, if you want to buy a small business and need capital, or if you want to invest in small businesses, go check out CapitalPad.com and tell them that Acquisitions Anonymous sent you. Are you guys sure the client is coming here? I thought the kind of aging in place trend and the explosion in cost of assisted living and all that stuff would actually drive this positively over time.

22:02I think that's actually a really good point because it's, you're right. It's not just the demographic trend as much as it is where are you aging between in a facility versus at home. And so, yeah, it's a great point. I don't know those numbers. I don't know those numbers either, but I mean, I have heard about the trend of aging in place, which more and more people are trying to do and which this is directly enabling. I mean, that's what this business is. So the question would be as if the like the market share of aging in place versus aging in a facility is shifting at a larger rate than any level of like demographic.

22:41Decline on that side of it, then it could be well positioned to continue. And I think geographically matters here. You know, where are people of a certain age moving? Where are the retirees living? And of course, aging in place requires that you have a place and the financial resources. So it has to, you know, has to hit a certain socioeconomic type of client. But I think, you know, where it is, Southern Virginia and North Carolina probably is in a great spot, probably a good market for exactly that. Yeah. Anecdotally, as a Gen X and with other Gen X I talked to, most of them would be excited.

23:20And Heather, you may veto me on this opinion, but of people I know, including myself, I would be excited to move to someplace like these senior communities. They seem super fun. There's a bunch of people around. They're doing the same stuff. I don't want to be alone in my 70s in my house all day. That doesn't sound like fun at all. I want to go back to summer camp, and that's what seems like all these boomers are doing. So anyway, that's just a negative for me in terms of Gen X's kind of generational attitude towards this stuff. I'm not quite sure it's a high growth market in the future. I'm sure there is data on this and I just don't know it.

23:53I will say my grandmother is over 90 and she lives in a retirement community and it seems like awesome. Like I want to move in. Like they've got a chef, they go eat dinner together, they got activities. Like it sounds amazing. I would definitely love to live there. My in-laws live in this one in Florida. It's like summer camp. Today we're going to go on an adventure. I'm like, this sounds awesome. Let's go do it. Yeah, they do field trips. They go see plays and stuff. It seems awesome. Have you heard some of the stories about coming out of the villages in Florida? Which ones? They party. They can put some fraternities to shame based on what I hear about some of the debauchery that happens there amongst the boomers.

24:37but they're enjoying themselves. Bill, am I allowed to talk about the anecdotes about STD rates at these places? I have heard the anecdotes. I have heard these anecdotes. Go ahead, Heather. You seem to have heard them. No, I just said I knew we were going there. I was worried about that when Conor brought it up. Go, Girdley. Welcome to the podcast. So it's not just summer camp. It's like summer camp. Now we know why Girdley's so excited. Oh, yeah. That's right. Lucky for you guys, Mrs. Girdley, is not a listener. So, but if you're listening, honey, not, not that reason. It's because I want to play beach volleyball with the other.

25:15Yeah. I mean, I like this business. Do you guys talk about the potential for recurring revenue here? I mean, if you install, like, is there some maintenance here? You know, if you, you get the house all tricked out and then, you know, the chair needs annual certifications or, you know, it's sort of like an elevator type situation. You got to inspect it. Uh, that was, uh, that was the first five minutes of the podcast. I went straight there. And I think that's a question, an open question. We didn't have an answer. Yeah. In fairness, to Michael's earlier point about how Michael doesn't use his elevator very frequently, I would say to that, you're not really the target audience to have an elevator in your home.

25:55I think that if you had the elevator installed for the purposes of using it, you probably would see more maintenance from it. So yeah, we don't know from this business how their revenue is broken down, but there probably is something residual there. So let's talk about the financing, if you don't mind. They basically mentioned the terms of an SBA loan without calling it an SBA loan. So I'm assuming that's kind of what they meant there, financing. And they showed it 120 months, 10-year loan, 10 and a half. It would actually be a little bit lower rate. Pay prime just dropped. So SBA rates are down a little bit now, which is nice.

26:34I think that there's just two things that a lender would have a hard time with on this one and not to say that they wouldn't do the loan but these are the two things that they would they would question the most the payer mix and the risk of any kind of changes in reimbursement rates so in other words if a lot of the revenue is tied to insurance they're going to want to know what's the history of changes in those reimbursement rates have they been coming down have they been staying stable and what do we think the future looks like are they going to continue to get paid at the same rate and then they would also press on percentage of project work which i think we decided we think is pretty high um and and just sort of understanding how long you know how do they have good revenue visibility if you if you're tied to all project work you know how far out can we see what sales look like um what does the marketing look like to keep that project work coming in consistently.